$2.2 Billion Merger Of Biggest Book Publishers Will Be Stopped By US Govt: Penguin Random House and Simon & Schuster Can’t Merge Now?
In a move that justifies equal competition opportunities to all sectors of industries rather than just the e-commerce sector or the smartphone industry to name a few, the Justice Department in the US has urged a judge in the country to prohibit giving a green signal to the merger of two of the biggest book publications in the world.
Two of the ‘Big Five’ group book publishers have sent a proposal of merger of $2.2 billion in value to a US court, which has been urged to be blocked by the U.S. Justice Department on Friday.
The department believes that this would create a further gray spot for smaller book publishers across the world.
In reality, almost 90% of the book publishing market is held by the top 5 publishing companies in the world.
The Justice department believes that if the merger of the two Big 5 companies gets approved, it would create a bigger problem and a worse situation for the smaller rival publishing companies.
It is already very difficult for small scale authors to penetrate the highly concentrated publishing market, mentioned Justice Department lawyer John Read in the US court. “Even Amazon has not succeeded,” he added.
The two Big 5 companies looking to sign a merger agreement include the world’s largest book publisher Penguin Random House, owned by German media group Bertelsmann SE & Co KGaA buying buying rival Simon & Schuster from Paramount Global, stated Reuters,
“This is not about a love of books. There is no dispute that Penguin will be more dominant than it already is if the merger succeeds”, stated Read.
However, the German media group owned Penguin Random House said that the merger would bring in enormous benefits to readers and authors.
However, the government officials were of the view that the compensation provided by Penguin to buy out Simon & Schuster would lead to fewer authors staying in the business and fewer stories being told.
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