#Penguin Random House, Simon & Schuster propose $2.2B mega-merger

Penguin Random House has reached a $2.2 billion deal to acquire Simon & Schuster from ViacomCBS — a tie-up that would create a colossus distributing about a third of all books sold in the US.

The merger would create a publishing house of unrivaled size with more than $3 billion in revenue, uniting Penguin Random House — the biggest book publisher in the US, owned by Germany-based Bertelsmann — with Simon & Schuster, which is the nation’s third-largest.

As such, legal experts say the deal will likely attract scrutiny from the US Justice Department, which is set to review it.

Robert Thomson, CEO of News Corp. — whose HarperCollins is the No. 2 book publisher in the US — blasted the deal in a Wednesday statement. “There is clearly no market logic to a bid of that size — only anti-market logic,” Thomson said. “Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors and readers would be paying for this proposed deal for a very long time to come.”

Calling the proposed combo a “literary leviathan,” Thomson added that it would control 70 percent of the literary and general fiction market. In particular, the deal would throw bestselling authors including John Irving, John Grisham, Stephen King and Bob Woodward under the same roof.

“There will certainly be legal books written about this deal, though I wonder if Bertelsmann would publish them,” said Thomson, whose News Corp. is also parent of The Post.

Harper Collins had also reportedly had been seen as a bidder as was Paris-based Vivendi. A News Corp spokesman declined to comment.

Simon & Schuster appears to have gotten an outsize price tag as the COVID-19 pandemic has spurred increased demand for books from consumers hunkered down at home. The publisher was helped in particular by a series of blockbuster political tomes tied to the stormy tenure of President Trump in the past year.

This year, Simon & Schuster published blockbuster bestsellers including “Rage” by Bob Woodward and “Too Much and Never Enough” by Donald Trump’s niece Mary Trump. It also published “The Room Where It Happened” by Trump’s former national security adviser John Bolton and Fox News host Sean Hannity’s pro-Trump book “Live Free or Die.”

Agents and authors often worry that a concentration of power in publishing could mean less competition for book deals, and lower advances.

Penguin Random House chief executive Markus Dohle told The Associated Press on Wednesday that Simon & Schuster would retain its editorial independence and that individual imprints within Penguin Random House and Simon & Schuster could continue to compete with each other for book deals.

Under the new company, every living former or current American president, from Jimmy Carter to Donald Trump, will have published a book with the new company. So will first ladies such as Barbara Bush, Hillary Clinton, Laura Bush and Michelle Obama.

Penguin Random House published Michelle Obama’s memoir “Becoming,” which has sold over 10 million copies as well as the first volume of Barack Obama’s new memoir, which set a one-day sales record when released earlier this month.

Simon & Schuster’s back list includes Scribner authors Ernest Hemingway and F. Scott Fitzgerald. Its stable of current writers includes Doris Kearns Goodwin and Mary Higgins Clark.

Simon & Schuster’s current president and chief executive, Jonathan Karp, will continue to lead the publishing house, said Bertelsmann. Dohle declined to say whether there would be any layoffs, saying it was too soon to speculate.

LionTree managed the divestment auction for ViacomCBS.

With Post wires