The UK competition regulator said it was examining the plans of Penguin Random House of rival publisher Simon & Schuster, a deal that would create a behemoth in the book industry.
The Competition and Markets Authority is examining the proposed merger as it could reduce competition, and said it would decide by May 19 whether to proceed to the merger. second level, reflecting more intense competition concerns.
Last November, Penguin’s parent Random House, German media giant Bertelsmann SE, agreed to acquire Simon & Schuster from ViacomCBS Inc.
VIAC 1.37%
for nearly $ 2.18 billion.
Penguin Random House is the world’s largest consumer book publisher, with a roster that includes retail authors such as John Grisham and Dan Brown.
At the time the deal was announced, Markus Dohle, chief executive of Penguin Random House, said he should not raise competition concerns, and noted that many new small publishers have emerged in the last decade. “There are a lot of successful new entrants on the market,” he said.
Penguin Random House UK said they are cooperating with the probe. Bertelsmann has said the deal is expected to close, subject to regulatory approval, this year.
Penguin Random House accounted for about 25% of print books sold in the U.S. in 2020 through Oct. 24, according to bookmaker NPD BookScan, while Simon & Schuster accounted for 9.1 %. Market share figures for the UK were not immediately available.
The second largest publisher in the U.S., HarperCollins Publishers, accounted for about 11% of print books sold in the U.S. in the same period. HarperCollins, like The Wall Street Journal, is owned by News Corp..
The proposed merger has gone against representatives and a major trade body for authors, who have argued that the agreement would give Penguin Random House too much market power.
The Authors Guild stated that the resulting company “would make up about 50% of all published trading books, creating a major imbalance in the U.S. publishing industry. ”The Guild also stated that the progress of books for authors would decline over time as there were fewer applicants for their books.
News Corp, which was among those interested in acquiring Simon & Schuster, spoke out against the proposed deal.
Write to Jeffrey A. Trachtenberg at [email protected]
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