The Penguin brand is seen on the spines of books displayed on a shelf at E book Passage on Nov. 2, 2021 in Corte Madera, California. The U.S. Division of Justice is suing Penguin Random Home and Simon & Schuster to dam the businesses from finishing a merger valued at $2.175 billion.
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Paramount World stated Monday it scrapped its $2.2 billion deal to promote guide writer Simon & Schuster to rival Penguin Random Home, weeks after a federal decide rejected the merger.
Penguin, which is owned by German media conglomerate Bertelsmann, stated it nonetheless believes Simon & Schuster is an efficient match for its enterprise, however that it accepted Paramount’s determination.
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“We consider the decide’s ruling is incorrect and deliberate to enchantment the choice, assured we may make a compelling and persuasive argument to reverse the decrease courtroom ruling on enchantment,” Penguin stated in an announcement Monday afternoon. “Nonetheless, now we have to simply accept Paramount’s determination to not transfer ahead.”
Paramount’s determination to tug the plug on the deal got here greater than a yr after the Justice Division sued to dam the deal, saying it could harm competitors for books within the publishing world. On Halloween, after a trial that included testimony from bestselling horror creator Stephen King, U.S. District Court docket Decide Florence Y. Pan on Halloween dominated in opposition to the deal, delivering a serious victory for the Biden administration’s antitrust agenda.
King, who writes books for Simon & Schuster, stated he was “delighted” by the ruling. “The proposed merger was by no means about readers and writers; it was about preserving (and rising) PRH’s market share. In different phrases: $$$,” he tweeted.
In its announcement Monday, Paramount stated Penguin is on the hook for a $200 million termination charge.
Paramount additionally indicated that it could nonetheless search to unload Simon & Schuster.
“Simon & Schuster is a extremely useful enterprise with a latest document of sturdy efficiency,” Paramount stated. “Nonetheless, it isn’t video-based and subsequently doesn’t match strategically inside Paramount’s broader portfolio.”
Learn Paramount’s full launch right here:
Paramount World (f/okay/a ViacomCBS Inc.) (“Paramount”) introduced that it and sure of its subsidiaries had entered right into a Share Buy Settlement (the “Buy Settlement”) to promote the Simon & Schuster enterprise to Penguin Random Home LLC (a part of the Bertelsmann SE & Co. KGaA group, “Penguin Random Home”), topic to the satisfaction of sure customary situations, together with receipt of relevant regulatory approvals (the “Sale”).
On November 2, 2021, the U.S. Division of Justice (the “DOJ”) filed swimsuit in the US District Court docket for the District of Columbia to dam the Sale and on October 31, 2022, the Court docket dominated in favor of the DOJ, enjoining the Sale (the “Determination”). Following the Determination, on November 21, 2022, Paramount terminated the Buy Settlement in accordance with its phrases. Penguin Random Home is obligated to pay a $200 million termination charge to Paramount. Simon & Schuster stays a non-core asset to Paramount, as was decided in early 2020 when Paramount carried out a strategic overview of its property.
Simon & Schuster is a extremely useful enterprise with a latest document of sturdy efficiency; nevertheless, it isn’t video-based and subsequently doesn’t match strategically inside Paramount’s broader portfolio.