Penguin Random House-Simon & Schuster merger: Explanation of the billion-dollar deal and Stephen King’s involvement

It’s a story that has the makings of a bestseller – a billion-dollar deal, a court battle, and endorsement from the King of Horror.

Penguin Random House, a publishing giant, is hoping to buy its competitor Simon & Schuster in a mega deal that would transform the publishing industry.

But the Biden administration has tried to intervene through the US courts, with the Department of Justice (DOJ) suing to prevent the merger.

Let us keep you up to date on the court case troubling the publishing industry.

What’s the matter?

In 2020, German media giant Bertelsmann announced its plan for its Penguin Random House division to buy fellow publisher Simon & Schuster from television and film company ViacomCBS for $2.17 billion.

The merger would reduce the so-called Big Five of publishing – which also includes HarperCollins, Hachette Book Group and Macmillan – to four.

The announcement was not well received and drew intense scrutiny from state regulators.

The US Department of Justice argues that the merger would harm authors and ultimately readers.

Penguin Random House argues that the combined publishers could produce books more efficiently.(AP: Jenny Kane)

It says the deal would stifle competition and give Penguin Random House gargantuan influence over what books get published in the US and beyond, not just how much authors get paid, leaving consumers with fewer books to choose from.

If approved, the new company would be by far the largest book publisher in US history.

Leave a Comment