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Stephen King will struggle for US authorities in guide publishing mega-merger case

WASHINGTON, Aug 1 (Reuters) – The U.S. Division of Justice requested a federal decide on Monday to dam a $2.2 billion merger of two of the “Large 5” guide publishers, Penguin Random Home. and Simon & Schuster, in a trial that owes testimony from horror author Stephen King.

“It is actual cash for actual folks,” mentioned John Learn, a Justice Division legal professional.

Additionally on Monday, in the identical federal courtroom in Washington, the Division of Justice argued earlier than a unique decide that UnitedHealth Group (UNH.N)’s $8 billion deal to purchase Change Healthcare (CHNG.O) ought to be interrupted. see Extra info

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In judging the merger of publishers, the federal government is targeted not on what customers pay for books, however on advances paid to essentially the most profitable authors, particularly these incomes $250,000 or extra.

“Proof will present that the proposed merger would doubtless lead to authors of better-selling anticipated books receiving smaller advances, that means authors who work for years on their manuscripts will obtain much less for his or her efforts,” the federal government mentioned at a pre-trial briefing.

The federal government additionally intends to point out that there was concern among the many events to the merger that the deal isn’t authorized. He beforehand launched an e-mail despatched by Simon & Schuster CEO Jonathan Karp, who wrote: “I am positive the Justice Division wouldn’t enable Penguin Random Home to purchase us, however that is assuming we nonetheless have a Justice Division. “.

King, writer of “The Shining,” “Carrie” and different blockbusters, will testify on behalf of the federal government, together with publishing executives and authors’ brokers.

Hachette E book Group CEO Michael Pietsch is because of testify on Monday, whereas King is because of testify on Tuesday.

Penguin Random Home, the biggest guide writer in the USA, mentioned it plans to purchase rival Simon & Schuster in November 2020. Penguin Random Home is owned by German media conglomerate Bertelsmann (BTGGg.F). Simon & Schuster is owned by ViacomCBS, now Paramount International (PARA.O). The Division of Justice filed its lawsuit in November 2021. learn extra

The protection, led by legal professional Daniel Petrocelli, who defeated the Trump administration’s 2018 try to dam AT&T Inc (TN) from shopping for Time Warner, argued that the marketplace for books and publishers to win bestselling authors is aggressive and that the merger will make it much more so.

The federal government is asking the courtroom to dam the merger “for lower than 100 books a yr,” Petrocelli mentioned in opening arguments, rejecting the concept that the largest booksellers can scale back advances.

The editors will argue that the proof exhibits that, in bidding for potential bestsellers, Penguin Random Home and Simon & Schuster are “hardly ever the highest two bidders.”

The highest 5 publishers are Penguin Random Home, HarperCollins, Macmillan, Simon & Schuster and Hachette, with Walt Disney Co (DIS.N) and Amazon.com Inc (AMZN.O) additionally out there. HarperCollins is owned by Information Corp (NWSA.O).

Choose Florence Pan of the US District Court docket for the District of Columbia will determine whether or not the settlement can go forward. The trial is predicted to final two to a few weeks.

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Reporting by Diane Bartz and David Shepardson in Washington; Edited by Matthew Lewis and Mark Porter

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Diane Bartz

Thomson Reuters

Centered on US antitrust in addition to company regulation and laws, with expertise overlaying battle protection in Bosnia, elections in Mexico and Nicaragua, in addition to reporting from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.

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