The worlds largest publisher, Penguin Random House, has abandoned plans to acquire Simon & Schuster for $2.2 billion.
Earlier this month, a US court reportedly halted this transaction between Simon & Schuster and Penguin Random House. US District Judge Florence Pan stated in a ruling that the agreement might considerably stifle competition in the publishing sector.
Paramount Global, the proprietor of Simon & Schuster, opted not to appeal the decision, according to Penguins parent firm Bertelsmann. Interestingly, the proposed agreement would have solidified Penguin Random Houses status as the foremost book publisher in the world.
The business issued a statement saying that they found the judges ruling incorrect. However, it accepted Paramounts choice not to proceed.
The US Justice Department had demonstrated, according to Judge Florence Pans decision on October 31, that the agreement might significantly diminish competition in the market for the US publication rights to expected best-selling books.
The US government argued that Simon & Schuster jointly with Penguin would control almost 50% of the publishing industry, which would be unfair to the others.
When the decision was first announced, Penguin declared it would appeal, calling it a terrible defeat for readers and authors.
As the two publishing houses would still be in competition with one another after combining, Penguins attorney, Daniel Petrocelli, claimed that readers and authors would reap numerous advantages from the merger.
In the same context, best-selling horror author Stephen King, refuted the assertion. He asserted that this deal was absurd, and it would be like saying that a married couple would go against one other for the same house.
A USD 200 million termination fee is due from Penguin Random House to Paramount.
A public statement issued by Paramount mentioned that Simon & Schuster would continue to remain a non-core resource to Paramount. However, because it was not video-based, it cannot be effectively incorporated into Paramounts larger portfolio.