Court Blocks Merger of Penguin Random House and Simon & Schuster

A Federal Court has blocked Penguin Random House’s acquisition of 1 of its main rivals, Simon & Schuster. The ruling by justice Florence Y. Pan was announced precocious successful the time connected October 31, but the afloat bid is temporarily sealed to support confidential information. The lawsuit has been watched intimately by the publishing manufacture — which has already seen extended consolidation successful the past 20 years — and beyond.

A little two-page papers was released by the District Court for the District of Columbia, stating that “Upon reappraisal of the extended grounds and cautious information of the parties’ arguments, the Court finds that the United States has shown that ‘the effect of [the projected merger] whitethorn beryllium to substantially lessen competition’ successful the marketplace for the U.S. publishing rights to anticipated top-selling books.”

Penguin Random House has already announced that they program to entreaty the ruling and officials released the pursuing statement:

“We powerfully disagree with today’s decision, which is an unfortunate setback for readers and authors, and we volition instantly petition an expedited appeal. As we demonstrated passim the trial, the Department of Justice’s absorption connected advances to the world’s best-paid authors alternatively of consumers oregon the aggravated competitiveness successful the publishing assemblage runs contrary to its ngo to guarantee just competition. We judge this merger volition beryllium pro-competitive, and we volition proceed to enactment intimately with Paramount and Simon & Schuster connected adjacent steps.”

The Justice Department connected the different manus has praised the ruling blocking the $2.2 cardinal acquisition, stating that the determination “protects captious contention for books and is simply a triumph for authors, readers, and the escaped speech of ideas. The projected merger would person reduced competition, decreased writer compensation, diminished the breadth, depth, and diverseness of our stories and ideas, and yet impoverished our democracy.” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division besides called it “a triumph for workers much broadly.”

The acquisition by Penguin Random House, the azygous largest publishing location successful the United States, of Simon & Schuster, the 4th largest, was archetypal announced successful November 2020. The merger would person created a publishing institution that controlled astir one-third of the publishing business. The Department of Justice sued Penguin Random House implicit the projected acquisition successful November 2021 and it went to proceedings successful August 2022. The proceedings was watched intimately by the manufacture and officials astatine Penguin Random House, officials astatine the different Big Five publishers, literate agents, and authors testified implicit the people of the trial.

Author Stephen King, who testified against the merger, has said successful effect to the ruling that helium is delighted “that Judge Florence Pan has blocked the merger of Penguin Random House and Simon & Schuster. The projected merger was ne'er astir readers and writers; it was astir preserving (and growing) PRH’s marketplace share. In different words: $$$” His comments person been echoed by galore successful the manufacture crossed societal media successful the aftermath of the announcement.

To work much of our reporting of the projected merger and the DOJ’s response:

Penguin Random House to Buy Simon & Schuster

Justice Department Sues to Block Penguin Random House Acquisition of Simon & Schuster