which owns book publisher Simon & Schuster, said Monday in a federal filing that it has terminated its agreement to sell Simon & Schuster to rival Penguin Random House.
Paramount stated that Simon & Schuster “remains a minor asset” and that the publisher “does not strategically fit into Paramount’s broader portfolio”, suggesting that Simon & Schuster would eventually return to the sales block.
In a letter to staff, Simon & Schuster CEO Jonathan Karp said he “doesn’t have concrete information on what’s going to happen in the coming months.” However, Karp called 2022 “one of the greatest years in our history” and said the company “has never been more profitable and valuable than today.”
The proposed $2.18 billion settlement, which was announced in November 2020, was blocked on Oct. 31 by U.S. District Judge Florence Pan on competitive grounds. Penguin Random House, owned by German media company Bertelsmann SE, said at the time that it would seek an expedited appeal. and subsequently approached Paramount Global for support.
However, The Wall Street Journal reported Sunday night that Paramount Global had decided not to support the expedited appeal, effectively ending the settlement.
Under the terms of the 2020 deal, Bertelsmann has agreed to pay a $200 million termination fee to Paramount if the acquisition is “completely prohibited or the termination date is reached,” according to Bertelsmann’s 2021 annual report. The end date is November 21, the magazine previously reported.
Paramount Global confirmed in a statement that Penguin Random House must pay him $200 million. A Penguin Random House spokesman said Bertelsmann would make the payment.
Bertelsmann confirmed that the merger was over. In a statement, CEO Thomas Rabe said the book business remains a core business and “Bertelsmann plans to achieve five to ten percent annual growth in this area, both organically and through acquisitions.”
The Justice Department did not immediately respond to a request for comment.
The merger would put authors like John Grisham, Stephen King and Bob Woodward under the same publishing roof.
In November 2021, the Justice Department sued to block the deal, arguing that it was anti-competitive and that advances to authors of intended bestsellers would fall as a result of the deal.
Potential bidders for Simon & Schuster include HarperCollins Publishers, which, like The Wall Street Journal, is owned by News Corp, and Hachette Livre, which includes all of Lagardère SCA’s global book publishing interests, according to HarperCollins executives. Publishers and Hachette Book Group Lagarder. . KKR & Co. has also shown interest in Simon & Schuster and could be a potential buyer, the magazine previously reported.
It’s been a tough year for book publishers. According to NPD BookScan, print book sales fell 5.8% as of November 12 to fewer than 625 million copies, after rising 8.4% and 11%, respectively, in the comparable periods of 2020 and 2021. .