Planned since the end of 2020, the nuptials in American publishing between the number one, Penguin Random House (PRH, a subsidiary of the German Bertelsmann), which wanted to buy out its rival Simon & Schuster (the fourth publisher on the American market, owned by Paramount Global) have been blocked by the US administration. Florence Pan, the federal judge in Washington, challenged, Monday, October 31, this proposed acquisition of an amount of 2.18 billion dollars (2.19 billion euros).
The administration of Joe Biden, which is increasingly opposed to excessive concentrations in the United States, had brought an action through the United States Department of Justice (DoJ) by estimating that the juggernaut resulting from this merger risked reduce the number of books published and reduce the financial advances made to authors, especially best-selling books.
At the beginning of August, the pleadings had followed one another for three weeks in the American court of the district of Washington and had made it possible to hear all the gratin of the American edition, between the CEOs of the “Big Five” (the five largest groups whose those targeted by the merger but also Hachette Book Group, HarperCollins and Macmillan), a good number of prominent writers and the most influential literary agents.
Under seal
In her judgment, Florence Pan considers that the takeover of Simon & Schuster (the publisher of Francis Scott Fitzgerald, Ernest Hemingway, John Irving, Don DeLillo, Bob Woodward, etc.) by PRH (which published the memoirs of Barack Obama and about to publish those of Prince Harry) “could have the effect of significantly lessening competition” in this bestseller market. Unusually, this judgment has been placed under seal because it contains information “highly confidential”explained the magistrate.
Unsurprisingly, the Bertelsmann subsidiary called this decision a “unfortunate setback for readers and authors”while announcing its willingness to appeal by requesting an emergency procedure.
Violently opposed to this merger, Stephen King, one of the leading authors of Simon & Schuster, was delighted “The proposed merger was never about readers and writers; it was about preserving (and grow) PRH’s market shares. In other words: $$$”, he wrote on Twitter. In a similar vein, Jonathan Kanter, assistant attorney general for the antitrust division, called the decision a “victory for authors, readers and the free exchange of ideas” who “protects competition in publishing”.
I am delighted that Judge Florence Pan has blocked the merger of Penguin Random House and Simon & Schuster. The pro… https://t.co/Iff2FH2ruw
PRH will have to pay 200 million dollars to the owner of Simon & Schuster in the event of non-conclusion of the takeover. Without waiting for the judgment of the DoJ, the Lagardère group, parent company of Hachette Livre, had indicated on October 27 that it would apply for the takeover of Simon & Schuster if this sale were to fail. One of Hachette’s bosses had also testified against the merger operation during the trial. HarperCollins (Rupert Murdoch’s NewsCorp group), unsuccessful candidate for the takeover of Simon & Schuster, has also let it be known that he would be back in the running if Bertelsmann had to throw in the towel.