Paramount Global finally reached an agreement with equity firm KKR to sell the famous publishing company Simon & Schuster for $1.6 billion in cash. Paramount Global has been trying for three years to unload the publishing company from its radar.
Paramount Global is a video entertainment company that mostly focuses on entertainment and mass media. Hence, as per Bob Bakish, the CEO of Paramount Global, the publishing company Simon & Schuster did not fit well with the core mission of the former.
Bob Bakish maintained that Simon & Schuster is a “fantastic asset” in the company’s earnings call on Monday after the market closure.
However, Paramount Global is unloading the company since it did not fit well with the company’s mission and vision in the long term. He added,
“Importantly, this transaction checks all the boxes from a financial perspective.”
According to Bakish, the proceeds from this sale will go towards clearing the debts of Paramount Global.
According to CNN Business,
“Paramount posted Simon & Schuster for sale in 2020. In November 2022, Paramount ended its agreement to sell Simon & Schuster to Penguin Random House in what would have been a $2.2 billion deal. Both are among the “Big Five” of major US book publishers – the potential deal raised antitrust concerns.”
The Justice Department did not allow the merger of Penguin Random House and Simon & Schuster. In October 2022, the US District Court declared that the merger would be illegal as it would reduce competition in the book publishing market.
The lawsuit said the merger would give too much control over how much authors should get paid. It also argued that the merger would result in fewer bidders for books that are highly anticipated. This factor would give a potential blow to writers.
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