Attorneys for Penguin Random House and ViacomCBS argued on Monday that the proposed sale of Simon & Schuster will benefit authors, and should not be blocked under federal antitrust law.
The Department of Justice filed the suit last month, seeking to block ViacomCBS from selling Simon & Schuster to Bertelsmann, the parent of Penguin Random House, in a $2.1 billion transaction.
Penguin Random House is the world’s largest publisher, and Simon & Schuster is the fourth largest. The government argued that the combination would reduce advances for top-selling authors and would ultimately harm consumers by resulting in fewer books being published.
In a formal answer filed in court on Monday, the companies argued that the deal is actually “pro competitive” and should be approved.
“DOJ cannot show that the merger will likely reduce competition or diminish pay for book rights at any level of the market,” the attorneys argue. “The merger will instead allow Penguin Random House to bring enhanced distribution capacity to a greater number of authors, including Simon & Schuster’s authors. The proposed merger is pro-competitive in every way.”
ViacomCBS and Bertelsmann announced the deal in November 2020, but it has been delayed due to the DOJ review. ViacomCBS is looking to spin off an asset it acquired in 1994, as part of its acquisition of Paramount Communications.
Dan Petrocelli, lead attorney for Penguin Random House and Bertelsmann, also issued a statement on Monday.
“Penguin Random House’s acquisition of Simon & Schuster is pro-competitive in every respect,” he said. “It will benefit authors, booksellers, and readers for generations to come. DOJ wants to block the merger on the misguided theory it will diminish compensation to the highest paid authors. This is not only legally, factually, and economically wrong, but it also ignores the vast majority of authors who indisputably will benefit from the transaction. We are fully confident that this merger will only enhance competition across the entire spectrum of the publishing industry.”
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