The Times - UK (2020-11-26)

44 2GM Thursday November 26 2020 | the times

Business

The owner of Penguin Random House
is set to buy Simon & Schuster for
nearly $2.2 billion to consolidate its
position as the world’s largest book
publisher.
Bertelsmann, the German media
group, outbid News Corp, the owner of
Harper Collins, and other rivals in a
“highly competitive” auction for Simon
& Schuster, which is owned by
ViacomCBS, the American media and
entertainments group.
If the deal passes muster with
regulators, it will bring America’s third
largest book publishing house under

the same roof as the global market

leader, putting it further ahead of

Harper Collins, the No 2 in the United

States. It will give Bertelsmann about a

third of the American book market,

three times the share of Harper Collins,

which could pique the interest of

competition authorities.

Marisa Corvisiero, an independent

literary agent in New York, said:

“Penguin Random House keeps gob-

bling up the competition. This is not

good news.”

Robert Thomson, chief executive of

News Corp — which is the ultimate

owner of The Times — said: “There is

clearly no market logic to a bid of that

size, only anti-market logic.

“Bertelsmann is not just buying a

book publisher, but buying market

dominance as a book behemoth. Dis-

tributors, retailers, authors and readers

would be paying for this proposed deal

for a very long time to come. This liter-

ary leviathan would have 70 per cent of

the US literary and general fiction

market. There will certainly be legal

books written about this deal, though I

wonder if Bertelsmann would publish

them.”

Simon & Schuster will fall under the

Penguin Random House umbrella but

will be managed as a separate pub-

lishing unit. Jonathan Karp, chief

Penguin owner adds

Simon & Schuster to

its bulging bookshelf

executive of Simon & Schuster, will

remain in the same role. Simon & Schu-

ster was founded in New York in 1924 by

Richard Simon, a piano salesman, and

Max Schuster, a trade magazine editor.

Its stable of authors includes Ernest

Hemingway, Stephen King, Bob Wood-

ward and Hillary Clinton. The publish-

er owns about 50 imprints, including

Marble Arch Press, Scout Press and

Scribner, and publishes about 2,000

titles a year.

Penguin Random House owns 325

imprints that publish 70,000 digital and

15,000 print titles a year. It is home to

authors including John Grisham,

Alexander McCall Smith and Nick

Hornby. Its imprints include Penguin

Classics, DK, Writer’s Digest Books and

Putnam. The publisher was formed in

2013 by the merger of Penguin Group,

which was owned by Pearson, the

British media company, and Random

House, owned by Bertelsmann. The

German company bought Pearson’s

stake in Penguin Random House last

year.

Thomas Rabe, chairman and chief

executive of Bertelsmann, said that the

deal “marks another strategic mile-

stone in strengthening our global con-

tent businesses”. Bertelsmann, founded

in 1835 by Carl Bertelsmann, is one of

the world’s largest privately owned me-

dia companies. The Gutersloh-based

group employs about 126,000 people

worldwide and reported revenue of

€18 billion last year.

ViacomCBS was formed by the

merger of Viacom and CBS, the Amer-

ican media companies, in December

last year. The $21 billion group is con-

trolled by the Redstone family, an

American media dynasty.

ViacomCBS said that the sale of

Simon & Schuster would provide funds

for Paramount+, its new streaming

video business, and would help it to

reduce debt and fund its dividend.

ViacomCBS said that the deal was

expected to be completed next year. Its

shares closed up 0.9 per cent at $34.82.

James Dean US Business Editor

Rupi Kaur is one of the authors at Simon & Schuster

The government is in talks with De La

Rue over the supply of coronavirus

“immunity certificates” and authenti-

cating vaccines.

The printing company said yesterday

that it was in the early stages of nego-

tiations with Whitehall and pharma-

ceuticals groups.

“We have very strong products

for authenticating vaccines and

test kits and providing immu-

nity certificates,” Clive Vacher,

50, De La Rue’s chief execu-

tive, said. “It is still very early

days. The government still

hasn’t made decisions on what

they want and pharmaceuticals

companies are still deciding on

how they want to protect vaccines

through the supply chain.”

In June De La Rue said that it had

been awarded a contract by an un-

De La Rue set for vaccines role

Alex Ralph named customer to authenticate and

protect Covid-19 testing kits that were

being shipped worldwide. In July it said

that it had developed existing “physical

and digital solutions” to provide a

coronavirus immunity certification

scheme.

The authentication business is one

of De La Rue’s three divisions, along

with its core banknote business,

whose customers include the

Bank of England, and its dwin-

dling passports unit.

In results yesterday for the

half-year to September 28,

adjusted operating profit rose

to £15.3 million from £2.2 mil-

lion a year ago, helped by cost-

cutting. Revenues fell by 22.6

per cent to £179.7 million, weak-

ened by the sale of its international

identity business and the loss of the

UK passport contract. Its shares fell

14½p, or 8 per cent, to 166½p last night.

Eurostar asks

for the same

aid as aviation

Robert Miller

Eurostar has warned that it is “fighting

for its survival” and has called for more

financial support from the government.

The cross-Channel rail operator

claimed that it was being treated unfair-

ly after the aviation sector was given

extra assistance in the coronavirus

pandemic. On Tuesday the govern-

ment said that it would cover up to

£8 million of business rates liabilities at

each big English airport.

Eurostar said: “The new scheme of

rates relief for airports puts Eurostar at

a direct disadvantage against its airline

competitors.

“Eurostar has been left fighting for its

De La Rue has won a

previous contract to

authenticate testing

kits shipped abroad

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14 ½p, or 8

Battle of the best sellers

Global

revenue

US market share: 25%

Imprints: 325, including Penguin Classics,

DK, Writer’s Digest Books

Notable authors: Nick Hornby (right),

Zadie Smith, Barack Obama

Penguin Random House

Owner: Bertelsmann, Germany

Source: company filings, NPD BookScan. *“Publishing” revenue at

ViacomCBS. ** “Book publishing” revenue at News Corp

2019

2018

$4.33bn

$4.06bn

Global $1.67bn

revenue** $1.75bn

US market share: 11%

Imprints: 120, including Hanover Square

Press, Collins, Graydon House Books

Notable authors: Charles Dickens (right),

Mark Twain, David Walliams

Harper Collins

Owner: News Corp, USA

2020

2019

Global $215m

revenue* $218m

US market share: 9.1%

Imprints: 50, including Marble Arch

Press, Scout Press, Scribner

Notable authors: Ernest Hemingway

(right), Rupi Kaur, Stephen King

2019

2018

Simon & Schuster

Owner: ViacomCBS, USA

S

O

Behind the story

T

his is not the first

time that

Bertelsmann has

rocked America’s

book publishing industry

(James Dean writes). In

1998 it bought New York’s

Random House for about

$1.3 billion. All of a

sudden, the works of

Truman Capote, Margaret

Atwood and Michael

Crichton were in German

hands.

It was the start of an

acquisition spree in which

Bertelsmann tightened its

grip on the global market

over the next two decades,

bringing hundreds of

sought-after imprints

under its roof.

In 2013, Bertelsmann

turned to Britain. It