US government against billion dollar deal from Bertelsmann subsidiary

The US government wants to prevent the multi-billion dollar takeover of US publisher Simon & Schuster by Penguin Random House, a subsidiary of Bertelmann. The US Department of Justice filed a lawsuit in federal court in Washington on Tuesday. If the world’s largest book publisher is allowed to acquire one of its biggest competitors, it will have unprecedented control over the vital industry, Attorney General Merrick Garland said. Either way, only five companies would control the US publishing industry. Simon & Schuster is considered number four. Bertelsmann announced in 2020 that it wanted to buy Simon & Schuster from the American company Viacom for 2.175 billion dollars. This should strengthen Penguin’s presence in the US. Among others, novelist Stephen King, Pulitzer Prize winner Anthony Doerr and journalist Bob Woodward would be won. In the event of a buyout, there would be an overwhelming influence over who and what is published and how authors are paid for their work, the plaintiffs said. Penguin Random House would hold nearly half of the market for publishing rights to best-selling books after a merger, he said. The closest competitor is less than half that size. Penguin Random House and Simon & Schuster said they will vigorously fight the lawsuit. The book sales market is cracked and the combined market share of the two publishers is below worrying levels. When the purchase was announced nearly a year ago, Bertelsmann boss Thomas Rabe said he was confident competition watchdogs in the United States and other countries would approve. the project. Penguin Random House and Simon & Schuster would only have a combined share of sales of less than 20 percent in the United States. In addition, it must be taken into account that the online retailer Amazon is playing an increasingly important role in the book market.

Related Articles

Back to top button