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Bertelsmann has said it will appeal a court ruling that has blocked the planned $2.2bn merger of Penguin Random House and Simon & Schuster.
C.e.o. Thomas Rabe said he believed the court decision had been based on "incorrect assumptions", and will be filing a motion with the Court of Appeals.
The ruling was announced on 31st October by federal judge Florence Pan, who ruled in favour of the US Department of Justice. It followed a three-week trial in August. The $2.2bn deal was originally announced in 2020, and was put on trial, lasting three contentious weeks in August.
Rabe said: "We do not share the court’s assessment any more than we previously shared the Department of Justice’s position. Both are based on incorrect basic assumptions, including an inaccurate definition of the market. A merger would be good for competition. We remain convinced that Bertelsmann and Penguin Random House would be the best creative home for Simon & Schuster — with a wide variety of publishers that could operate independently under one umbrella. We will be filing a motion to appeal with the DC Court of Appeals.”
Jonathan Karp, c.e.o. of Simon & Schuster US, said: "Paramount is disappointed by the ruling in this case. We are reviewing the decision and discussing the next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal.”
Penguin Random House c.e.o. Markus Dohle told delegates at Sharjah’s Publishing Conference in the United Arab Emirates that he was “super disappointed” by the US court’s decision.
“It has been a tough night. It’s a political decision and we think it’s utterly wrong,” he said. “We have to accept the ruling but we will think about an appeal. The idea of bringing Simon & Schuster together with Penguin Random House is simple. Publishing is one writer at a time, one story at a time, one book idea at a time, one editor being passionate about a manuscript. There is no scalability. Authors would have benefited from our global reach because of more royalties and ultimately we would pay more taxes too. We would have sold more of Simon & Schuster’s books. After the merger we would still be less than 20% of the US trade book market and Amazon is around 50%.”
A spokesperson for PRH said after the ruling: "We strongly disagree with today’s decision, which is an unfortunate setback for readers and authors, and we will immediately request an expedited appeal. As we demonstrated throughout the trial, the Department of Justice’s focus on advances to the world’s best-paid authors instead of consumers or the intense competitiveness in the publishing sector runs contrary to its mission to ensure fair competition.
"We believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on the next steps."
Additional reporting by Roger Tagholm.