Penguin's £2.18bn Simon & Schuster takeover faces UK competition probe
The UK's competition watchdog said on Monday it is looking into whether the merger of Penguin Random House and Simon & Schuster would reduce competition in the publishing marketplace.
The £2.18bn ($3bn) acquisition of Simon & Schuster from ViacomCBS was agreed last year in a move Penguin hoped would strengthen its presence in the US. At the time, Penguin's owner, Bertelsmann, outbid Rupert Murdoch's News Corp.
Firms will be invited to comment on the investigation between now and 7 April, after which a phase one decision will be made by the Competition Markets Authority (CMA) on 19 May.
Bertelsmann chief executive Thomas Rabe has previously said the merged entity would have a market share of less than 20%, making the deal passable.
The deal has come under fire from others in the publishing world, however. The Authors Guild said last year that it would result in fewer competing bidders for manuscripts as well as lower pay. It urged the Department of Justice to challenge it as well as refuse further deals in the US publishing industry.
News Corp CEO Robert Thomson also criticised the deal saying it had an "anti-market logic."
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Penguin is the world's largest trade publishing group — it has more than 15,000 new publications and sells more than 600 million books a year.
A Penguin Random House UK spokesperson said: “We have notified the acquisition of Simon and Schuster to the UK Competition and Markets Authority as is normal in such circumstances and we are working with the CMA in its review.”
Simon & Schuster had not responded to Yahoo Finance requests for comment at the time of publication.
Watch: Bertelsmann buys Simon & Schuster for $2bn
