Simon & Schuster Merger with Penguin Random House Officially Fails

After a federal judge blocked the $2.2 billion acquisition of Simon & Schuster the rival publishing house Penguin Random House planned, Simon & Schuster’s corporate parent has officially ended the agreement.

According to the agreement’s original terms, Penguin Random House, which is owned by the German conglomerate Bertelsmann, owes a $200 million termination fee to Paramount.

The publisher’s statement on Monday informs that Penguin Random House remains convinced it would have been the best home for Simon & Schuster’s staff and authors and plans to appeal the decision, noting, however, it has to accept Paramount’s decision not to move forward with the deal.

First announced late in 2020, the proposed merger of the two publishing giants would have resulted in by far the biggest book publishing house in US history, but the Biden administration, which has sought to toughen its antitrust enforcement, contended last year in a lawsuit filed by the Justice Department that the new company would’ve led to lower advances for authors and stifle competition for best-selling books.

Simon & Schuster, a nearly century-old company where authors include Stephen King, Colleen Hoover, and Bob Woodward, however, still remains for sale, as Paramount Global also announced Monday.

Pointing out that Simon & Schuster remains a highly valuable business and a non-core asset to Paramount, the company decided it does not fit strategically within Paramount’s broader portfolio since it’s not video based.

Thanks in part to bestsellers by Hoover and King, who had opposed the merger and even testified on behalf of the Biden administration during the antitrust trial last summer, Simon & Schuster has had a strong 2022 so far.

However, the remaining three publishers of the book publishing’s so-called “Big Five” – HarperCollins Publishing, Hachette Book Group, and Macmillan – may now try Simon & Schuster.

Hachette CEO Michael Pietsch expressed interest in Simon & Schuster during the trial while HarperCollins’ offer was among the losing bids to Penguin Random House’s $2.2 billion offer.