A judge has blocked a bid from publishing giant Penguin Random House to purchase Simon & Schuster, in a $2.175 billion deal that would have seen the two mammoth companies merge

A federal judge has blocked a bid from publishing giant Penguin Random House to purchase rival Simon & Schuster, in a $2.175 billion deal that would have seen the two mammoth companies merge as one.

The judgment comes as a significant accomplishment for the federal government, as it strives to set a precedent for antitrust enforcement.

U.S. District Court Judge Florence Pan announced the decision in a brief statement Monday, adding that much of her ruling remained under seal due to it containing ‘highly confidential information.’ 

Proceedings saw the Washington, DC, jurist agree with the Justice Department, in that the joining of two of the world’s biggest publishers could ‘lessen competition’ for ‘top-selling books.’ 

Penguin, the country’s biggest book publisher, has since condemned the ruling, calling it ‘an unfortunate setback for readers and authors.’ 

The company said it would appeal the decision, as it prepares to publish Prince Harry’s memoir ‘Spare,’ which will acknowledge death of his grandmother Queen Elizabeth II, his marriage to Meghan Markle, and his relationship with the Royal Family.

The book has an on-sale date of January 10, 2023 – though it is not clear if the recent judgment will affect that rollout.

In its statement Monday, Penguin said it would seek an expedited appeal, after attempting to fight off the federal regulations for the better part of a year.

A judge has blocked a bid from publishing giant Penguin Random House to purchase Simon & Schuster, in a $2.175 billion deal that would have seen the two mammoth companies merge

A judge has blocked a bid from publishing giant Penguin Random House to purchase Simon & Schuster, in a $2.175 billion deal that would have seen the two mammoth companies merge

The judgment comes as a significant accomplishment for the federal government, as it strives to set a precedent for antitrust enforcement.

The judgment comes as a significant accomplishment for the federal government, as it strives to set a precedent for antitrust enforcement. 

The ruling served as a crucial victory for the Biden administration’s tougher approach to proposed mergers – a break from decades of precedent under both Democratic and Republican leadership. 

Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division praised the decision, declaring in a statement it ‘protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas.’

He added: ‘The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.’

Pan’s finding was not surprising – through much of the 3-week trial in August she had indicated agreement with the Justice Department´s contention that Penguin Random House´s plan to buy Simon & Schuster for $2.2 billion might damage a vital cultural industry.

But it was still a dramatic departure from recent history in the book world and beyond. 

The publishing industry has been consolidating for years with little interference from the government, even when Random House and Penguin merged in 2013 and formed what was then the biggest publishing house in memory. 

The joining of Penguin Random House and Simon & Schuster would have created a company far exceeding any rival and those opposing the merger included one of Simon & Schuster’s signature writers, Stephen King, who testified last summer on behalf of the government.

Second-biggest publisher Simon and Schuster will remain its own entity after Monday's judgement. Pictured is the publisher's headquarters in Midtown Manhattan

Second-biggest publisher Simon and Schuster will remain its own entity after Monday’s judgement. Pictured is the publisher’s headquarters in Midtown Manhattan

At the time, the author of ‘The Shining,’ ‘Carrie’ and other blockbusters, told the court that if the two mammoth publishing houses merge and still fight against each other for books, it will be like ‘a husband and wife bidding against each other for the same house.’ 

With those sentiments likely in mind, the 75-year-old horror icon tweeted Monday he was ‘delighted’ by the ruling, adding: ‘The proposed merger was never about readers and writers; it was about preserving (and growing) PRH´s market share.’ 

He would go on to clarify: ‘In other words: $$$.’

The Biden Justice Department has been pushing forward with aggressive enforcement of federal antitrust laws that officials say aim to ensure a fair and competitive market.

Monday’s news follows recent losses for the department in two significant antitrust cases in separate federal courts. 

Legendary horror writer Stephen King tweeted Monday he was 'delighted' by the ruling after testifying it was unjust over the summer, stating: 'The proposed merger was never about readers and writers; it was about preserving (and growing) PRH´s market share'

Legendary horror writer Stephen King tweeted Monday he was ‘delighted’ by the ruling after testifying it was unjust over the summer, stating: ‘The proposed merger was never about readers and writers; it was about preserving (and growing) PRH´s market share’

The DOJ lost its bid to block a major U.S. sugar manufacturer, U.S. sugar, from acquiring its rival Imperial Sugar Co., one of the largest sugar refiners in the nation. The prosecutors signaled that they intended to appeal the decision. 

They also were stymied in their effort to block the roughly $8 billion acquisition by UnitedHealth Group, which runs the largest U.S. health insurer, of Change Healthcare, a healthcare technology company.

The DOJ also has been battling American Airlines and JetBlue in an antitrust trial in federal court in Boston, challenging their regional partnership in the Northeast, which the government calls a de facto merger.

The Justice Department’s case against Penguin Random House did not focus on market share overall or on potential price hikes for customers. 

The DOJ instead argued that the new company would so dominate the market for commercial books, those with author advances of $250,000 and higher, that the size of advances would go down and the number of releases would decrease.

For Penguin Random House and the New York-based publishing world, the trial in August proved an often-uncomfortable airing of business practices, internal disagreements and missed opportunities. 

Executives on the stand spoke of bestselling works they failed to acquire and acknowledged that most books don’t make money. Emails and private text messages revealed tension among top Penguin Random House officials.

‘I apologize for the passionate language,’ Penguin Random House’s global, CEO Markus Dohle, testified after some text messages were displayed.

Dohle had promised that imprints of Penguin Random House and Simon & Schuster would still be permitted to bid against each other for books. But he acknowledged under oath during the trial that his guarantee was not legally binding. 

The company said it would appeal the decision, as it prepares to publish Prince Harry's memoir 'Spare,' which will acknowledge death of his grandmother Queen Elizabeth II , his marriage, and his relationship with the Royal Family

The company said it would appeal the decision, as it prepares to publish Prince Harry’s memoir ‘Spare,’ which will acknowledge death of his grandmother Queen Elizabeth II , his marriage, and his relationship with the Royal Family 

Pan otherwise persistently challenged Penguin Random House´s assurances that the merger would not reduce competition.

Simon & Schuster will likely end up under new ownership, no matter the outcome of any legal appeals. 

The publisher had been up for sale well before the Penguin Random House deal was announced late in 2020 and the publisher’s corporate parent, Paramount Global, has said it did not see Simon & Schuster as part of its future. 

Under bidders against Penguin Random House included Rupert Murdoch’s News Corp, which owns HarperCollins Publishers.

Penguin Random House and corporate owner Bertelsmann would have to pay a termination fee of around $200 million to Paramount should the merger fall through, according to the terms of the proposed sale.

The book has on-sale date of January 10, 2023 - though it is not clear if the recent judgment will affect that rollout

The book has on-sale date of January 10, 2023 – though it is not clear if the recent judgment will affect that rollout 

Simon & Schuster is one of the country’s oldest and most successful publishers, with authors ranging from King and former Secretary of State Hillary Clinton to Colleen Hoover and Doris Kearns Goodwin. 

Authors at Penguin Random House include Clinton’s husband, former President Bill Clinton, ‘Where the Crawdads Sing’ novelist Delia Owens and historian Robert A. Caro.

In a company memo Monday shared with The Associated Press, Simon & Schuster CEO Jonathan Karp sought to reassure employees that ‘despite this news, our company continues to thrive. 

‘We are more successful and valuable today than we have ever been, thanks to the efforts of all of you on behalf of our many magnificent authors,’ the notice read.

Pan, meanwhile, has since been appointed to the U.S. Court of Appeals for the D.C. Circuit, replacing Ketanji Brown Jackson after she was nominated by Biden and approved by the Senate for the Supreme Court.

The bombshell judgment comes as it was revealed by People magazine that Prince Harry will acknowledge Queen Elizabeth II’s death in his upcoming memoir.

The book, titled Spare, was largely penned before the death of Her Majesty on September 8 – but the magazine this week revealed that the prince will touch on her passing in his book, after it was delayed following the Queen’s death.

In his statement paying tribute to his grandmother shortly after her death, Harry praised her ‘sound advice’ and ‘infectious smile’ and called her a ‘guiding compass’ through her commitment to service and duty. 

Released on September 12, 2022, his remarks also referred to his ‘darling wife’ Markle.

Harry, 38, also spoke on how grateful he was that the Queen had hugged her ‘beloved great-grandchildren’ and of how he ‘cherished’ the times spent with the 96-year-old monarch. 

He said: ‘In celebrating the life of my grandmother, Her Majesty The Queen – and in mourning her loss – we are all reminded of the guiding compass she was to so many in her commitment to service and duty.

The joining of Penguin Random House and Simon & Schuster would have created a company far exceeding any rival and those opposing the merger

The joining of Penguin Random House and Simon & Schuster would have created a company far exceeding any rival – an occurrence the federal judge presiding over the case determined was unjust 

‘She was globally admired and respected. Her unwavering grace and dignity remained true throughout her life and now her everlasting legacy.

‘Let us echo the words she spoke after the passing of her husband, Prince Philip, words which can bring comfort to all of us now: ‘Life, of course, consists of final partings as well as first meetings.’

‘Granny, while this final parting brings us great sadness, I am forever grateful for all of our first meetings – from my earliest childhood memories with you, to meeting you for the first time as my Commander-in-Chief, to the first moment you met my darling wife and hugged your beloved great-grandchildren.

‘I cherish these times shared with you, and the many other special moments in between. You are already sorely missed, not just by us, but by the world over. And as it comes to first meetings, we now honor my father in his new role as King Charles III.

‘Thank you for your commitment to service. Thank you for your sound advice. Thank you for your infectious smile.

‘We, too, smile knowing that you and grandpa are reunited now, and both together in peace.’ 

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