Penguin Random House, the world's largest book publisher, and rival Simon & Schuster have scrapped a US$2.2 billion deal to merge, Penguin owner Bertelsmann said in a statement.

Bertelsmann, a German media group which owns Penguin, initially said it would appeal against a US judge's decision that said its purchase of Simon & Schuster would be illegal because it would hit authors' pay.

But Bertelsmann said in a statement on Monday that it "will advance the growth of its global book publishing business without the previously planned merger of Penguin Random House and Simon & Schuster."

Reuters reported on Sunday that the German company was unable to convince Paramount Global, Simon & Schuster's owner, to extend their deal agreement and appeal against the judge's decision.

Judge Florence Pan of the US District Court for the District of Columbia ruled on October 31 that the Justice Department had shown the deal could substantially lessen competition "in the market for the US publishing rights to anticipated top-selling books."

With the deal's dissolution, Penguin will pay a US$200 million termination fee to Paramount.

Paramount said on Monday that Simon & Schuster was a "non-core asset" to Paramount. "It is not video-based and therefore does not fit strategically within Paramount's broader portfolio," the company said in a filing on the deal's termination.

The Justice Department did not immediately respond to a request for comment. (Reuters)