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Competition Commission seeks feedback on F&N's bid for Penguin Random House units (Amended)
THE Competition Commission of Singapore (CCS) is studying Fraser and Neave's (F&N) proposed acquisition of the Singapore and Malaysia distribution arms of global publisher Penguin Random House, and is seeking public feedback on the deal.
The public consultation will close on Feb 6, 2017.
F&N on Jan 9 said that its Time Publishing unit will buy Penguin Random House Pte Ltd and Penguin Books Malaysia for S$8 million from Penguin Random House. As part of the deal, the two distribution units will enter into exclusive distribution agreements with Penguin Books, The Random House Group, Dorling Kindersley and Penguin Random House LLC for the Singapore and Malaysia markets.
In its notification to the CCS, F&N said that the market for book distribution was "highly competitive" with a "multitude of vertically integrated publishers, independent distributors, online platforms and overseas wholesalers".
"Even if F&N holds exclusive distribution rights to certain publishing brands, the publishers, retailers and dealers will still retain strong bargaining power, the company argued."
"Publishers and retailers/dealers have strong bargaining power relative to distributors, as publishers hold the publishing rights to the trade," F&N said. "Books, and for retailers and dealers, the sale of trade books typically constitutes only a part of the products sold. Accordingly, publishers and retailers/dealers are able to exercise strong countervailing buyer power and impose downward pressure on pricing and terms."
F&N shares were not traded as at 2.35 pm on Friday, but were bid at S$2.12 and offered at S$2.15. Thai Beverage Public Co, which owns a 28.5 per cent stake in F&N, slipped one Singapore cent or 1.2 per cent to S$0.85.