UK competition watchdog will probe Penguin Random House’s £1.45bn take-over of Simon & Schuster over fears it will create a ‘behemoth of books’ by reducing the ‘big five’ publishing firms to just four
- CMA has said that it is investigating the purchase of Simon & Schuster by PRH
- It will see if it causes a ‘substantial lessening of competition within any market’
- If CMA launches in-depth probes, it could see restrictions being placed on deal
Penguin Random House’s £1.6billion takeover of a US publishing rival is to be probed amid concerns it will create a ‘books behemoth’.
The Competition and Markets Authority (CMA) said it is investigating the purchase of Simon & Schuster, which was announced following an auction last year.
Regulators will consider before May 19 whether the takeover could result in a ‘substantial lessening of competition within any market or markets in the UK’.
If the CMA presses ahead with more in-depth probes, it could ultimately result in restrictions being placed on the deal – or see it blocked outright.
Through Penguin, German parent firm Bertelsmann last year outbid Rupert Murdoch’s News Corp in a contest to buy Simon & Schuster, the publisher of Dan Brown, Hillary Clinton and Stephen King.
S&S is being sold by Viacom, which put on the block last year.
The Competition and Markets Authority (CMA) said it is investigating the purchase of Simon & Schuster, which was announced following an auction last year. Pictured: Barack Obama’s book was published by PRH
Regulators will consider before May 19 whether the takeover could result in a ‘substantial lessening of competition within any market or markets in the UK’. Pictured: Margaret Atwood has books published by PRH
If the CMA presses ahead with more in-depth probes, it could ultimately result in restrictions being placed on the deal – or see it blocked outright. Pictured: Zadie Smith has books published by PRH
The deal would cement Bertelsmann as the world’s biggest bookseller after the 185-year-old publisher took full control of Penguin Random House from Pearson in 2019.
It will also mean that the number of large mainstream publishing houses will go down from five to just four in the US.
Thomas Rabe, Bertelsmann’s boss, has insisted the merged entity will have a US market share of less than 20 per cent, making the transaction ‘approvable’.
But other industry figures see the deal very differently, with News Corp boss Robert Thomson claiming Bertelsmann is ‘buying market dominance as a book behemoth’ and that it had an ‘anti-market logic’.
The Authors Guild also warned last year the deal would mean fewer competing bidders for manuscripts – giving Bertelsmann more bargaining power and raising the spectre it could squeeze writers with lower pay.
Chief Executive of the Society of Authors Nicola Solomon told the Guardian: ‘The deal will make Penguin Random House the biggest publisher by quite a long way, and it already is the biggest.
Through Penguin, German parent firm Bertelsmann last year outbid Rupert Murdoch’s News Corp in a contest to buy Simon & Schuster, the publisher of Dan Brown, Hillary Clinton (pictured) and Stephen King
Best-selling fiction writer Stephen King (pictured) has books published by Simon & Schuster
The deal would cement Bertelsmann as the world’s biggest bookseller after the 185-year-old publisher took full control of Penguin Random House from Pearson in 2019. Pictured: Ernest Hemingway whose books have been published by Simon & Schuster
‘We have nothing against the practices of either company but combined there is that potential for market dominance.
‘Our concern is just that it isn’t in anyone’s interest to have someone in a monopoly position.’
Penguin, the world’s biggest trade publishing group, has more than 15,000 new publications and sells more than 600million books a year.
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