Court blocks PRH acquisition of S&S

Bertelsmann, the parent company of Penguin Random House, will appeal a ruling by a US federal court blocking its proposed acquisition of Simon & Schuster (S&S).

In a two-page order, judge Florence Pan found: ‘the United States has shown that “the effect of [the proposed merger] may be substantially to lessen competition” in the market for the U.S. publishing rights to anticipated top-selling books,’ reports Publishers Weekly. ‘Accordingly, judgment shall be entered in favor of the Plaintiff and the merger shall be enjoined.’

The court’s full opinion has not been made public because it contains confidential information, however a redacted version will be released once the parties involved have met to confer and jointly file proposed redactions, which they have until 4 November to do.

Bertelsmann CEO Thomas Rabe said: ‘We do not share the court’s assessment any more than we previously shared the Department of Justice’s position. Both are based on incorrect basic assumptions, including an inaccurate definition of the market. A merger would be good for competition. We remain convinced that Bertelsmann and Penguin Random House would be the best creative home for Simon & Schuster—with a wide variety of publishers that could operate independently under one umbrella. We will be filing a motion to appeal with the D C Court of Appeals.’

As previously reported by Books+Publishing, in 2020 Bertelsmann announced its plans to acquire S&S from media company ViacomCBS for US$2.175 billion (A$2.95b). It expected the deal to settle in 2021. However, the US Department of Justice sued to block the acquisition, alleging the move would ‘enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work’.

The merger has previously been cleared in the UK by the Competition and Markets Authority.

Category: International news