BERLIN — German media giant Bertelsmann received a setback Thursday as Germany’s antitrust watchdog said it would block the group’s acquisition of Axel Springer’s book publishers.
The federal antitrust office said it could not allow Bertelsmann’s Random House, the world’s largest book publisher, to control up to 40% of the paperback market.
Random House inked in February to buy Springer’s Ullstein Heyne List to beef up its core business in its key domestic market. The money-losing Ullstein is the local publisher of bestselling authors like Tom Clancy, John Grisham and Stephen King.
Approval for the deal is still pending at the German cartel office.
Office: Changed needed
“The merger cannot be approved in the structure in which it was filed for approval,” the watchdog said in a statement. The companies have until June 5 to react to the office’s concerns. A final decision is expected by the end of June.
Random House rejected the cartel office’s argument that it would gain domination of the paperback market, saying that the deal would leave it with only 11% of the entire book market. The company believes it can still win cartel office approval, adding that it would take its case to court if need be. Random House posted worldwide sales of $2.3 billion last year.
Bertelsmann this month sold its BertelsmannSpringer science and trade publishing unit to British-based private equity firms Cinven and Candover for $1.2 billion.