Britain probes publisher Penguin’s takeover of Simon & Schuster

(Reuters) – Britain’s competition watchdog is investigating if the $2.18 billion takeover of Simon & Schuster by publisher Penguin Random House to beef up its U.S. presence may hurt competition, it said on Monday.

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.

Bertelsmann and Simon & Schuster did not immediately respond to Reuters requests for comments.

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 logic”.

The Authors Guild said here last year the deal would mean fewer competing bidders for manuscripts and lower pay, urging the Department of Justice to challenge it as well as refuse to allow further deals in the U.S. publishing industry.

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.

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