US blocks Germany's Bertelsmann from publishing mega-merger

A US federal judge blocked publishing giant Penguin Random House from merging with one of its biggest competitors, Simon & Schuster.

The ruling late on Monday dealt a blow to German behemoth Bertelsmann. 

The company owns Penguin Random House and had pushed for the acquistion.

What did the US court say?

District Court Judge Florence Pan sided with the US Justice Department, which successfully argued that the merger violated anti-monopoly laws.

In her ruling, Pan stated that the government had convincingly shown the move would dramatically decrease competition "in the market for the US publishing rights to anticipated top-selling books."

The $2.2 billion deal, first proposed in November 2020, would have combined two of the "big five" publishing houses in the US. The others in that group include HarperCollins, Hachette Book Group USA and Macmillan Publishers.

After the ruling, Bertelsmann and Penguin Random House announced they will seek an expedited appeal.

Is there support in the publishing world for the ruling?

Famed horror author Stephen King, one of Simon & Schuster's best-selling authors, welcomed the ruling in a statement against his own publisher.

"The proposed merger was never about readers and writers," He wrote on Twitter.

In 2021, the UK also had its competition authority review the proposed merger, as both groups have British divisions. In that case, a judge ruled in favor of the deal.

es/ar (AP, AFP)