UK Watchdog investigates Penguin Random House acquisition of Simon & Schuster

Last November, the parent of Penguin Random House, German media giant Bertelsmann SE, agreed to acquire Simon & Schuster from ViacomCBS Inc.

AFTER 1.44%

for nearly $ 2.18 billion.

Penguin Random House is the world’s largest publisher of mainstream books, with a roster that includes bestselling authors such as John Grisham and Dan Brown.

At the time of the deal’s announcement, Markus Dohle, managing director of Penguin Random House, said he should not raise competition concerns and noted that over the past decade many smaller publishers appeared. “There have been a lot of newcomers who have been successful in the market,” he said.

Penguin Random House UK said it was cooperating with the investigation. Bertelsmann said the transaction, subject to regulatory approvals, is expected to close this year.

Penguin Random House accounted for about 25% of all printed books sold in the United States between 2020 and October 24, according to the NPD BookScan book tracker, while Simon & Schuster accounted for 9.1%. UK market share figures were not immediately available.

The second-largest publisher in the United States, HarperCollins Publishers, accounted for about 11% of print books sold in the United States during the same period. HarperCollins, like the Wall Street Journal, is owned by News Corp.

The proposed merger faced opposition from agents and a leading trade group for the authors, who argued the deal would give Penguin Random House too much market power.

The Authors Guild said the resulting company “will account for about 50% of all commercial books published, creating a huge imbalance in the US publishing industry.” The Guild also said book advances for authors will decrease over time as there will be fewer bidders for their books.

News Corp, which was among those interested in acquiring Simon & Schuster, also spoke out against the proposed deal.

Write to Jeffrey A. Trachtenberg at [email protected]