PENGUIN TO BUY SIMON & SCHUSTER, CREATE PUBLISHING GIANT

German media giant Bertelsmann said that its Penguin Random House division is buying rival Simon & Schuster in a megadeal that would reshape the U.S. publishing industry.

Penguin Random House, already the largest American publisher, will buy the New York-based Simon & Schuster, whose authors include Stephen King, Hillary Clinton and John Irving, from TV and film company ViacomCBS for $2.17 billion in cash.

“Simon & Schuster strengthens Bertelsmann’s footprint globally, and (particularly) in the U.S., its second-largest market,” the Guetersloh, Germany-based company said in a statement.

The purchase of Simon & Schuster would reduce the so-called Big Five of American publishing — which also includes HarperCollins, Hachette Book Group and Macmillan — to four.

The companies said the deal is expected to close in 2021, subject to regulatory approval. No U.S. publisher in modern times would approach the power of the new company. ViacomCBS said Bertelsmann will pay a termination fee if the deal fails due to regulatory reasons.

Agents and authors often worry that a concentration of power in publishing could mean less competition for book deals, and lower advances.