Headquarters of the Simon & Schuster publishing house in New York. SARAH YENESEL (EFE)
Cataclysm in the American publishing sector. KKR & Co, a private equity and investment fund, will buy Simon & Schuster, the publishing arm of Paramount Global, for $1.62 billion in cash. Following the closing of the acquisition, the company will operate as an independent business and its CEO, Jonathan Karp, will continue in office, Paramount reported on Monday. The operation is subject to the approval of regulatory bodies.
The Redstone family-controlled media and entertainment company plans to use the proceeds from the sale to pay off the group’s billion-dollar debt as it pilots a transition from traditional television networks like CBS and MTV to online ones like its streaming service. Paramount+.
They were also interested in buying Simon & Schuster HarperCollins, belonging to the Rupert Murdoch News Corporation media group, and investor Richard Hurowitz, backed by an Abu Dhabi investment fund. Simon & Schuster is one of the Big Five New York publishers, along with Bertelsmann’s Penguin Random House, HarperCollins Publishing, Hachette Book Group and Macmillan.
The Simon & Schuster sale is not just a multi-billion dollar business transaction; it is a symbol that changes hands. A hundred-year-old company, it publishes the works of authors such as the best-seller Stephen King or the journalist of the Watergate case Bob Woodward, among some 2,000 titles a year. Paramount signed a $2.18 billion deal in November 2020 to sell the company to Bertelsmann’s Penguin Random House division, which would have made the resulting company the most powerful publishing group in the US. But the US Department of Justice The US blocked the sale under antitrust law (President Joe Biden’s Administration has taken a hard line on antitrust, unlike previous governments). After a three-week trial last summer, in which King himself testified against the merger, District Judge Florence Pan ruled in October in favor of the government and struck down the merger, finding that the Justice Department had presented “a compelling case predicting substantial harm to competition.” Bertelsmann agreed to pay $200 million in breach of contract last year.
In a sector handcuffed by the distribution giant Amazon, and where success stories are scarce -the only thing worth mentioning is the formidable expansion of the Barnes & Nobles bookstore chain-, the sale of Simon & Schuster has been received with caution, both by the fear of losing the cultural capital that it treasures as well as the distance from the world of culture of its new owner. The agreement with KKR had been advanced this Sunday by some local media.
“We are delighted to have reached agreement on a transaction that returns excellent value to our shareholders while positioning Simon & Schuster with KKR for their next phase of growth,” Paramount CEO Bob Kakish said in a statement. release.
Jonathan Karp, head of the publisher, said in the same statement that “with the support of KKR, we hope to collaborate on new strategies that will improve our ability to offer readers a wide variety of books and offer authors the best publication they can find.” they deserve”. Karp noted “KKR’s depth of interest in our business and their commitment to helping us grow, prosper and become an even stronger company.
Simon & Schuster will celebrate its centenary next year. The company, founded in 1924 by Richard Simon and Max Schuster, has changed ownership several times since Gulf+Western bought it in 1975.
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