Penguin Random House-Simon & Schuster merger: Explaining the billion-dollar deal and how Stephen King got involved

It’s a story that’s got the makings of a best-seller — a billion-dollar deal, a court battle, and an endorsement from the King of Horror.

Penguin Random House, a publishing titan, is hoping to buy its rival Simon & Schuster in a mega-deal that would reshape the publishing industry.

But the Biden administration has sought to intervene through the US courts, with the Department of Justice (DOJ) suing to block the merger from happening.

Let’s get you up to speed on the court case that’s gripping the publishing industry.

What’s the story?

In 2020, German media giant Bertelsmann announced its plan for its Penguin Random House division to buy fellow publishing giant Simon & Schuster for $US2.17 billion from TV and film company ViacomCBS.

The merger would reduce the so-called Big Five of publishing — which also includes HarperCollins, Hachette Book Group and Macmillan — to four.

The announcement was not well received and drew intense scrutiny from government regulators.

The US Justice Department argues that the merger would hurt authors and, ultimately, readers as well.

Penguin Random House argues that the combined publishers could turn out books more efficiently.(AP: Jenny Kane)

It says the deal would thwart competition and give Penguin Random House gigantic influence over which books are published in the US and beyond, not just how much authors are paid, giving consumers fewer books to choose from.

The new company, if approved, would be by far the biggest book-publishing entity in US history.

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