Paramount Global said Monday it 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 believes Simon & Schuster is a good fit for its company and has accepted Paramount’s decision.
“We believe that the judge’s ruling is wrong and intend to appeal the decision, confident that we can make a convincing and persuasive argument to overturn the lower court’s ruling on appeal.” Penguin said in a statement Monday afternoon. “However, we must accept Paramount’s decision not to proceed.”
In its announcement Monday, Paramount indicated it would still try to unload Simon & Schuster.
“Simon & Schuster is a very valuable company with a recent record of strong performance,” said Paramount. “However, it is not video-based and therefore strategically does not fit into Paramount’s broader portfolio.”
Paramount Global (f/k/a ViacomCBS Inc.) (“Paramount”) announced that the company and certain of its subsidiaries have entered into a share purchase agreement (the “Purchase Agreement”) to sell the Simon & Schuster business to Penguin Random House LLC (part of the Bertelsmann SE & Co. KGaA group, “Penguin Random House”), subject to the 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, imposing the Sale (the “Order”). Following the decision, on November 21, 2022, Paramount terminated the purchase agreement in accordance with its terms. Penguin Random House is required to pay a $200 million termination fee to Paramount. Simon & Schuster remains a non-core asset to 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 strategically does not fit into Paramount’s broader portfolio.
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