German media giant Bertelsmann said Wednesday that its Penguin Random House division is buying rival Simon & Schuster in a megadeal that would reshape the US 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. The purchase would reduce the so-called Big Five of American publishing—which also includes HarperCollins, Hachette Book Group, and Macmillan—to four. No US publisher in modern times would approach the power of the new company. The deal, expected to close in 2021, requires approval from the Justice Department. ViacomCBS said Bertelsmann will pay a termination fee if the deal fails due to regulatory reasons.
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, and said the Justice Department should challenge it. 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 the US literary and general fiction market." Penguin Random House Chief Executive Markus Dohle told the AP on Wednesday that Simon & Schuster would retain its editorial independence and that individual imprints within Penguin Random House and Simon & Schuster could continue to compete with each other for book deals.
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