UK competition watchdog launches investigation into Penguin Random House’s $2.18bn Simon & Schuster takeover

The UK competition watchdog has launched an investigation into Penguin Random House’s $2.18 billion (£1.45 billion) takeover of American rival Simon & Schuster's book publishing business.

The CMA said on Monday it is concerned that if completed the deal, which would boost PRH's US presence and make it by far the world's largest books publisher, could lead to “a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

German media giant Bertelsmann took full control of PRH from Pearson in April last year after outbidding rivals including Rupert Murdoch's News Corp, and announced its intention to buy Simon & Schuster from ViacomCBS in the blockbuster deal just seven months later.

Simon & Schuster is home to star authors including Stephen King and Dan Brown. The 185-year-old German publisher has said the deal would give it a US market share of less than 20%, and is therefore “approvable”.

The CMA is inviting comments from any interested parties.

News Corp boss Robert Thomson has previously said the deal has “anti-market logic” and would create a “book behemoth”, while organisations including the US National Writers Union have urged the Department of Justice to block the deal.

A Penguin Random House UK spokesperson said: “We announced last November that Penguin Random House is purchasing Simon & Schuster from ViacomCBS. The announcement stated that regulatory filings would be made. We have notified the acquisition of Simon & Schuster to the UK Competition and Markets Authority as is normal in such circumstances and we are working with the CMA in its review.”