Penguin Random House wanted to merge with Simon and Schuster, but the deal was scrapped before it even happened.
👉 Background: Penguin Random House is the largest book publisher in the world. It was formed in 2013 after the merger of Penguin Group and Random House. Very creative name, we know!
👉 What happened: Recently, Penguin Random House wanted to add another publisher to its stable - Simon and Schuster. While the Simon and Schuster crew agreed to the whopping $2.2 billion USD deal, the US Department of Justice sued to block the merger. And a judge agreed.
👉 What else: The reason? They believed this massive merger would reduce competition in the industry. So now, these two will break up before they even got together.
💡Competition is arguable the strongest form of motivation. In the US, the Department of Justice (DOJ) looks to crack down on big business mergers that could reduce competition in the market.
💡Competition is good for consumers, it's good for authors and ultimately it's good for the innovation of the whole industry.
💡Get this: the largest five publishers in the world control 90% of the book market and a combined Penguin and Simon & Schuster would control nearly 50% of the market. So it makes sense that this merger could stifle competition for best-selling books.
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