The Penguin logo can be seen on the spines of books displayed on a shelf at Book Passage on November 1. 2, 2021 in Corte Madera, CA. The US Department of Justice is suing Penguin Random House and Simon & Schuster to stop the companies from completing a merger valued at $2.175 billion.
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World Paramount said Monday it had scrapped its $2.2 billion deal to sell book publisher Simon & Schuster to rival Penguin Random House, weeks after a federal judge rejected the merger.
Penguin, which is owned by German media conglomerate Bertelsmann, said it still believed Simon & Schuster was a good fit for its business, but accepted Paramount’s decision.
“We believe the judge’s decision is wrong and plan to appeal the decision, confident that we could make a compelling and compelling case to overturn the lower court’s decision on appeal,” Penguin said in a statement Monday afternoon. . “However, we must accept Paramount’s decision not to proceed.”
Paramount’s decision to end the deal came more than a year after the Justice Department sued to block the deal, saying it would hurt competition for books around the world. of editing. On Halloween, after a trial that included testimony from best-selling horror author Stephen King, U.S. District Court Judge Florence Y. Pan on Halloween ruled against the deal, delivering a major win for the program antitrust of the Biden administration.
King, who writes books for Simon & Schuster, said he was “delighted” with the decision. “The proposed merger was never about readers and writers; it was to preserve (and increase) PRH’s market share. In other words: $$$,” he tweeted.
In its Monday announcement, Paramount said Penguin had to pay a $200 million termination fee.
Paramount also said it would still seek to offload Simon & Schuster.
“Simon & Schuster is a very valuable company with a recent record of strong performance,” Paramount said. “However, it is not video-based and therefore does not fit strategically into Paramount’s broader portfolio.”
Read the full version from Paramount here:
Paramount Global (f/k/a ViacomCBS Inc.) (“Paramount”) announced that it and certain of its subsidiaries have entered into a stock purchase agreement (the “Purchase Agreement”) to sell the Simon & Schuster business to Penguin Random House LLC (part of Bertelsmann SE & Co. KGaA, “Penguin Random House”), subject to satisfaction of certain customary conditions, including obtaining applicable regulatory approvals (the “Sale”).
On November 2, 2021, the United States Department of Justice (the “DOJ”) filed suit in the United States District Court for the District of Columbia to block the sale and on October 31, 2022, the court ruled in favor of the DOJ, ordering the Sale (the “Decision”). Following the decision, on November 21, 2022, Paramount terminated the purchase agreement in accordance with its terms. Penguin Random House is forced to pay Paramount a $200 million termination fee. Simon & Schuster remains a non-core asset for Paramount, as determined in early 2020 when Paramount conducted a strategic review of its assets.
Simon & Schuster is a very valuable company with a recent record of strong performance; however, it is not video-based and therefore does not fit strategically into Paramount’s broader portfolio.