BERLIN – German media giant Bertelsmann said on Wednesday that its Penguin Random House division was buying rival Simon & Schuster in a mega-deal that would reshape the US publishing industry.
Penguin Random House, already America’s largest publisher, to buy New York-based Simon & Schuster, whose authors include Stephen King, Hillary Clinton and John Irving, from television and film company ViacomCBS for $ 2.17 billion in cash.
“Simon & Schuster strengthens Bertelsmann’s presence globally and (in particular) in the United States, its second largest market,” the Guetersloh, Germany-based company said in a statement.
The purchase of Simon & Schuster would reduce the so-called Big Five of the US edition to four – which also includes HarperCollins, Hachette Book Group and Macmillan.
The companies said the deal is expected to close in 2021, subject to regulatory approval. No modern-day American publisher would approach the power of the new society. ViacomCBS said Bertelsmann will pay a termination fee if the deal fails for regulatory reasons.
Agents and authors often fear that a concentration of power in publishing will result in less competition for book contracts and less payoffs.
The Authors’ Guild, an organization of writers, said Wednesday it opposed the sale because it would hurt competition, making it more difficult for authors and agents to negotiate with publishers. He said the US Department of Justice should challenge it.
The ministry did not immediately return a request for comment.
“As an organization of writers, it is important to us that the publishing industry (thrives) and that there are multiple and solid outlets to offer the widest variety of books to the public,” said said Suzanne Nossel, CEO of PEN America. “To the extent that efficiencies are achieved through consolidation, we hope they will serve as a catalyst to enable increased investment in authors, books and reader outreach. “
Bertelsmann’s rival News Corp., owner of HarperCollins, also criticized the deal. “Bertelsmann not only buys a book publisher, but buys market dominance as a book juggernaut,” News Corp chief executive Robert Thomson said in a statement. “This literary leviathan is said to have 70% of the US market for literature and general fiction.”
Penguin Random House chief executive Markus Dohle told The Associated Press on Wednesday that Simon & Schuster would retain editorial independence and that the individual imprints within Penguin Random House and Simon & Schuster could continue to compete for them. book offers.
The current president and CEO of Simon & Schuster, Jonathan Karp, will continue to lead the publishing house, Bertelsmann said.
Under the new society, authors ranged from John Grisham and Stephen King to Barack Obama and Bill Clinton. Every current or former US president, from Jimmy Carter to Donald Trump, will have published a book with the new company. The same will be true of first ladies such as Barbara Bush, Hillary Clinton, Laura Bush and Michelle Obama.
Dohle declined to say if there would be any layoffs, saying it was too early to speculate.
The German conglomerate, which was founded in 1835 and also has a large portfolio of streaming, music and online businesses, has been the sole owner of Penguin Random House since April.
ViacomCBS put Simon & Schuster, founded in 1924, up for sale earlier this year as the entertainment company tries to sell “non-core assets” to pay off debt, please shareholders with dividends and buybacks. ‘stocks, and investing in streaming.
ViacomCBS owns the Nickelodeon, MTV, BET and Comedy Central cable networks as well as the CBS broadcast network and Paramount movie studio. It tries to support the shift of consumers from watching live television on a television to streaming shows and movies over the Internet.