(UK) – Publisher Penguin Random House’s $2.18 billion takeover of Simon & Schuster to beef up its US presence is being investigated by Britain’s competition watchdog.
Penguin-owner Bertelsmann outbid Rupert Murdoch’s News Corp in a contest for the publisher of Dan Brown, Hillary Clinton and Stephen King, which Viacom put on the block last year.
The deal is the second major move by Chief Executive Thomas Rabe’s drive to consolidate Bertelsmann as the world’s biggest bookseller after the 185-year-old publisher took full control of Penguin Random House from Pearson.
He had said the merged entity would have a U.S. market share of less than 20%, making the transaction “approvable”.
However, News Corp CEO Robert Thomson had criticised the deal saying Bertelsmann was “buying market dominance as a book behemoth” and it had an “anti-market l
It said the number of large mainstream publishing houses would go down from five to just four.
Penguin, the world’s biggest trade publishing group, has more than 15,000 new publications and sells more than 600 million books a year.