Richmond Times-Dispatch

Penguin to buySimon& Schuster

The new company would be unrivaled in publishing world

- BY FRANK JORDANS AND HILLEL ITALIE

German media giant Bertelsman­n said that its Penguin RandomHous­e division is buying rival Simon & Schuster in a megadeal that would reshape the U.S. publishing industry.

Penguin Random House, already the largest American publisher, will buy the New York-based Simon & Schuster, whose authors include Stephen

King, Hillary Clinton and John Irving, from TV and film company ViacomCBS for $2.17 billion in cash.

“Simon & Schuster strengthen­s Bertelsman­n’s footprint globally, and (particular­ly) in the U.S., its second-largest market,” the Guetersloh, Germanybas­ed company said in a statement.

The purchase of Simon & Schuster would reduce the so-called Big Five of American publishing — which also includes HarperColl­ins, Hachette Book Group and Macmillan— to four.

The companies said the deal is expected to close in 2021, subject to regulatory approval. No U.S. publisher in modern times would approach the power of the new company. ViacomCBS, which owns Simon & Schuster, said Bertelsman­n will pay a terminatio­n fee if the deal fails due to regulatory reasons.

Agents and authors often worry that a concentrat­ion of power in publishing could mean less competitio­n for book deals, and lower advances.

The Authors Guild, a writers’ organizati­on, said Wednesday that it opposed the sale because it would hurt competitio­n, making it more difficult for authors and agents to negotiate with publishers. It said the U.S. Department of Justice should challenge it.

The department did not immediatel­y return a request for comment.

“As an organizati­on of writers it’s important to us that the publishing industry [thrives], and that there be multiple, robust outlets to bring the widest variety of books to audiences,” said Suzanne Nossel, the CEO of PEN America. “To the extent that efficienci­es are garnered through consolidat­ion, it is our hope that they are a catalyst to enable greater investment in authors, books, and outreach to readers.”

Bertelsman­n’s rival

News Corp., which owns HarperColl­ins, also slammed the deal. “Bertelsman­n is not just buying a book publisher, but buying market dominance as a book behemoth,” said News Corp Chief Executive Robert Thomson said in a statement. “This literary leviathan would have 70% of theU.S. literary and general fiction market.”

Bertelsman­n, which was founded in 1835 and also owns a broad portfolio of broadcast, music and online businesses, has been the sole owner of Penguin Random House since April.

ViacomCBS put up Simon & Schuster, founded in 1924, for sale earlier this year as the entertainm­ent company tries to sell off “non-core assets” to pay down debt, please shareholde­rs with dividends and stock buybacks, and invest in streaming.

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