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New York (AFP) – The American media group Paramount Global has definitively given up selling its publishing house Simon & Schuster to its rival Penguin Random House, a few weeks after a court decision blocking the merger between these two industry giants in the name of competition laws .
The operation, involving an amount of 2.18 billion dollars, was announced in November 2020 and would have brought together two of the five largest American publishers.
But the US Department of Justice, which since Joe Biden came to power has stepped up the fight against anti-competitive practices, opposed this merger and filed a complaint a year later.
Combined, the two companies could lower the number of books published and reduce the advances paid to authors, argued the authorities.
A judge ruled in their favor at the end of October, finding that the government had provided evidence that the proposed acquisition “could have the effect of significantly weakening competition” in the bestselling book rights market.
“Following this decision (…), Paramount terminated the purchase agreement in accordance with the terms in force”, indicated the group in a document submitted Monday to the American authority of the financial markets (the SEC).
Penguin must now pay him a severance package of $200 million.
Lagardère interested
Its parent company, the German company Bertelsmann, said Monday that contrary to what it had initially announced, it would not appeal the court decision.
With 10,000 employees worldwide and nearly 15,000 books published per year, Penguin dominates the publishing market in the United States.
Even without the merger with Simon & Schuster, Penguin “will continue to grow significantly in the years to come, through its operations and through acquisitions”, assured Bertelsmann in a press release.
“The book trade has been part of Bertelsmann’s identity for 187 years, and that will not change,” said its CEO, Thomas Rabe, specifying that it is aiming for growth of 5% to 10% per year for the publishing house. editing.
The group notably published in 2020 the first volume of the memoirs of former President of the United States Barack Obama, entitled “A Promised Land”, and those of his wife, Michelle Obama, in 2018, which have passed dozens millions of copies.
It is also preparing to release British Prince Harry’s memoir in early 2023.
Paramount for its part still seems ready to sell Simon & Schuster, the American company emphasizing in its message to the SEC that the publishing house does not represent a strategic asset for it and does not fit into its overall strategy.
It publishes about 2,000 books a year, has in its catalog authors of international bestsellers such as the novelist Stephen King or the journalist Bob Woodward.
The French group Lagardère, owner of Hachette Livre, had indicated at the end of October that it would apply for the acquisition of Simon & Schuster if the sale of the latter to the German giant Bertelsmann were to fail.
“If Simon & Schuster were put back on sale by Paramount, we would of course be interested,” said Arnaud Lagardère, CEO of the group that bears his name, during a conference call.
When this house was put up for sale in 2020, his business was greatly weakened by the Covid-19 crisis.
From now on, “we are ready to compete (…) And we know that Vivendi is with us no matter what,” assured Arnaud Lagardère.
Lagardère, whose merger with the French media giant Vivendi is being studied until November 30 by the European competition authorities, could even risk it before obtaining the green light from Brussels, the manager had indicated.
© 2022 AFP