Status: 11/22/2022 8:26 am
The media company Bertelsmann does not want to appeal against a court ruling in the USA that prohibited the takeover of a US book publisher. This ended a year-long tug-of-war.
Bertelsmann’s multi-billion dollar plan to buy US book publisher Simon & Schuster is off the table. The media group confirmed yesterday evening that they do not want to take action against a judgment by a US court in Washington. The court had already prohibited the purchase at the end of October due to competition law concerns.
Contrary to what was originally planned, Bertelsmann does not want to pursue the takeover any further. This is the result of discussions with the media group Paramount Global, which owns Simon & Schuster.
US Department of Justice sues
This marks the end of a year-long tug of war. Bertelsmann had already declared in November 2020 that it wanted to buy its competitor Simon & Schuster through the US publishing group Penguin Random House, which belongs to the group, for almost 2.2 billion dollars.
The US Department of Justice had filed an antitrust lawsuit. With success: The government had convincingly explained that the planned merger would significantly weaken competition in the market for “US publishing rights to potential bestsellers,” according to the US court’s ruling at the end of October.
The court had argued that the proposed merger would have significantly reduced competition in the market for the publishing rights to the best-selling books in the United States.
Penguin Random House should continue to grow
With 10,000 employees worldwide and almost 15,000 books published annually, the Bertelsmann subsidiary Penguin Random House leads the US market. Simon & Schuster ranks fourth in the Big Five, which also includes publishers HarperCollins, Hachette Book Group USA and Macmillan Publishers.
According to Simon & Schuster parent company Paramount, Penguin Random House now has to pay a “breakdown fee” of $200 million. The collapse of the $2.2 billion deal is another setback for Bertelsmann boss Thomas Rabe.
Rabe now explained that Penguin Random House is part of the five strategic priorities. “Bertelsmann is planning annual growth of five to ten percent in this area – organically, but also through acquisitions.” Overall, the media, services and education group will invest between five and seven billion euros in the growth of its business in the coming years.
Is the competition now coming into play?
With the failure of the takeover by Bertelsmann, Simon & Schuster could now become interesting for other buyers. The publishing house HarperCollins, which belongs to News Corp, but also the Hachette Book Group of the French group Lagardere have already expressed their interest in buying.