HarperCollins and Simon & Schuster are in preliminary merger talks, according to the Wall Street Journal. Why not? Everybody’s doing it.
A merger between two of the other big six publishers was announced Oct. 29. Random House and Penguin plan to merge, after passing all regulatory hurdles. The deal is rumored to be for $2 billion to $3 billion; when you think about it, that’s a pretty big range, not to mention an enormous chunk of change for an industry that is commonly thought to be teetering on the edge of oblivion.
Rupert Murdoch’s News Corp. was rumored to have made a last-minute, $1.6-billion bid for Penguin. The offer, which would have merged Penguin with News Corp.'s HarperCollins, was rejected in favor of the deal with Random House.
Does that mean that there’s $1.6 billion in publishing dollars burning a hole in News Corp.'s pocket?
The Wall Street Journal implies that it does. After a significant scandal took down News Corp.'s News of the World paper, the company decided to split its holdings into two separately listed companies. One will emphasize filmed media, such as Twentieth Century Fox and the Fox News cable channel, while the other will group together its traditionally print media holdings, including the Wall Street Journal and HarperCollins.
“The new publishing company is expected to have a significant amount of cash on its balance sheet, potentially to be used for acquisitions,” the Wall Street Journal reports.
If HarperCollins and Simon & Schuster were to merge, publishing’s current “big six” companies would become an uneven foursome: two mega companies and two much smaller ones, Macmillan and Hachette. The bookstore Waterstone’s on Oxford Street in London tweeted, “it’s only a matter of time before Macmillan and Hachette merge to form Machete.”
Random House and Penguin are expected to become Penguin Random House (not the more amusing Random Penguin) in late 2013.
Sources emphasize that talks between HarperCollins and Simon & Schuster are preliminary.