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Restless conglomerates

4 August 2003

The relentless pace at which publishing houses are bought and sold on the international scene has slowed recently, as anti-monopoly rulings are brought to bear on proposed acquisitions.

In Germany the Bertelsmann purchase of Ullstein Heyne List has run into trouble because the Bundeskartellamt, the German monopolies and mergers commission, has objected to it. Random House Deutschland has retreated, saying it will go ahead only with the purchase of mass market paperback house Heyne, but there are still objections to this because it would give the publisher 39% of the paperback market. The legal limit on what any one company may own before being accused of market dominance is 33%. Worse still, from Random House's point of view, is the fact that the company agreed that it would satisfy the regulators if there was any objection, so it may be legally obliged to sell on the parts of the company it is not allowed to acquire.

In France the Hachette acquisition of the French conglomerate Vivendi's publishing interests has also hit the rocks. The European Commission has yet to decide whether to refer the proposed takeover to the French competition authorities, but in the meantime the French book world is making is opposition clear. This acquisition would put Hachette in a very strong position indeed, particularly as regards the highly sensitive area of literary publishing.

But restless conglomerates continue to range across the world, like giant birds of prey looking for new snacks. In a recent interview in the New York Times, Gunther Thielen, the head of Bertelsmann, has intimated that he might be prepared to go back to trying to acquire Time Warner Publishing once the £1.1bn sale of BertelsmannSpringer has gone through and the group has more cash at its disposal.