KKR, a Private Equity Firm, Acquires Simon & Schuster at $1.6B

By Ramishah Maruf | CNN

Paramount has agreed to sell Simon & Schuster to private equity firm KKR for $1.6 billion in cash, after more than three years of trying to offload the book publishing powerhouse.

Bob Bakish, president and CEO of Paramount Global, said Simon & Schuster is a “fantastic asset” in the company’s earnings call Monday, after the market’s close, but that it didn’t fit with its core mission of video entertainment.

“Importantly, this transaction checks all the boxes from a financial perspective,” Bakish said, adding the proceeds will go toward paying down Paramount’s debt.

The book publisher will go private once the deal closes and will be led by Jonathan Karp, its current CEO and president, and Dennis Eulau, COO and CFO.

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 sued to stop the merger, one of the first major antitrust actions from the Biden administration. In October 2022, US District Court Judge Florence Pan ruled the combination of the book publishing giants would illegally reduce competition.

The lawsuit said the deal would have given the combined company too much control over how much authors are paid. It also argued there would be fewer bidders for highly anticipated books, which would have been another potential blow to writers.

Penguin was obligated to pay Paramount a $200 million termination fee, and Paramount said it wouldn’t appeal the ruling blocking the merger.

The deal still has to go through the regulatory process.

KKR added it will create an employee equity ownership program once the deal closes, meaning the employees would own shares in the company.