The world’s largest publisher Penguin Random House and rival Simon & Schuster have called off a $2.2 billion deal to merge, the New York Times reported.
Penguin, a subsidiary of German media giant Bertelsmann, is obligated to pay Paramount, Simon & Schuster’s parent company, a $200 million termination fee, according to an SEC filing from Paramount. The proposed $2.17 billion deal was announced in November 2020. Bertelsmann had initially said it would appeal a US judge’s decision which said its bid to acquire Simon & Schuster was illegal because it would hit authors’ pay.
On Monday Bertelsmann said that it “will advance the growth of its global book publishing business without the previously planned merger of Penguin Random House and Simon & Schuster.”
Reuters reported on Sunday that the German company was unable to convince Paramount Global, Simon & Schuster’s owner, to extend their deal agreement and appeal the judge’s decision.
In late October, US District Court Judge Florence Pan ruled the combination of the book publishing giants would illegally reduce competition. The Justice Department had sued about a year ago to stop the merger, one of the first major antitrust actions from the Biden administration.
“Simon & Schuster is a highly valuable business with a recent record of strong performance,” Paramount said in a statement. “However, it is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”