Britain probes publisher Penguin's $2.2 bln Simon & Schuster deal (updated)

Paramount Global

22/03/2021 08:28

* CMA considering if deal could hurt competition
    * Penguin agreed to buy Simon & Schuster for $2.2 bln
    * Bertelsmann expects approvals to close this year

 (Adds comments from Bertelsmann, Penguin, details)
    By Tanishaa Nadkar
    March 22 (Reuters) - Britain's competition watchdog is
investigating whether Penguin Random House's $2.2 billion
takeover of Simon & Schuster may hurt competition, it said on
Monday, amid concerns that the deal could disadvantage writers
and damage the publishing industry.
    Penguin owner Bertelsmann  BTGGg.F  last year outbid Rupert
Murdoch's News Corp  NWSA.O  in a contest for the publisher of
Dan Brown, Hillary Clinton and Stephen King, which Viacom
 VIACA.O  had put on the block.  urn:newsml:reuters.com:*:nL8N2IB336
    The deal is the second major move by Bertelsmann Chief
Executive Thomas Rabe to expand the 185-year-old publisher after
it took full control of Penguin Random House, the world's
biggest bookseller, from Pearson  PSON.L  last year.
    He had said the merged entity would have a U.S. market share
of less than 20%, making the transaction "approvable".
    "We expect the regulatory approvals to close during 2021," a
Bertelsmann spokesman told Reuters on Monday.
    However, News Corp CEO Robert Thomson had criticised the
deal, saying Bertelsmann was "buying market dominance as a book
behemoth" and that it had an "anti-market logic".
    A representative for Penguin Random House, which was formed
in 2013 when Bertelsmann and Pearson combined their publishing
businesses Random House and Penguin Group, said the group was
working with Britain's Competition and Markets Authority in its
review.  
    It is now the world's biggest trade publisher, with more
than 15,000 new publications and over 600 million books sold a
year. 
    The Authors Guild said https://www.authorsguild.org/industry-advocacy/ag-statement-on-proposed-sale-of-simon-schuster-and-its-ramifications-for-authors
 last year the deal would mean fewer competing bidders for
manuscripts and lower pay, urging the U.S. Department of Justice
to challenge it as well as refuse to allow further deals in the
U.S. publishing industry.
    It said that the number of large mainstream publishing
houses would go down from five to four.
    Size is important in publishing as bestseller lists become
dominated by a handful of blockbusters, such as Penguin's
edition of ex-U.S. President Barack Obama's memoir A Promised
Land. 

 (Reporting by Tanishaa Nadkar in Bengaluru and Klaus Lauer in
Berlin; Editing by Arun Koyyur and Jan Harvey)
 ((tanishaa.nadkar@thomsonreuters.com; +919730172534; Twitter -
@TanishaaNadkar;))