A judge in the United States has blocked the Penguin Random House merger, crushing Bertelsmann's development plans.

A US federal judge barred the €2.3 billion merger between Penguin Random House and Simon & Schuster on Monday after concluding that the transaction may "substantially" impair competition "in the market for the US publishing rights to expected best-selling novels."

Bidding wars between Penguin Random House and Simon & Schuster for best-selling authors have increased earnings for these authors in recent....