ViacomCBS said it sold its venerable publishing company Simon & Schuster for $2.175 billion in cash.
The buyer was Bertelsmann’s Penguin Random House LLC unit, which outbid other suitors, reportedly including Rupert Murdoch's News Corp.
News Corp. CEO Robert Thomson criticized the deal.
“There is clearly no market logic to a bid of that size - only anti-market logic. Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors and readers would be paying for this proposed deal for a very long time to come," Thomson said in a statement. "This literary leviathan would have 70 percent of the US Literary and General Fiction market. There will certainly be legal books written about this deal, though I wonder if Bertelsmann would publish them.”
ViacomCBS said was getting out of the book business following a strategic review earlier this year that identified non-core assets. Proceeds from the transaction will be used to invest in ViacomCBS’s other businesses, including streaming, as will pay shareholders dividends and reduce debt.
ViacomCBS is in the process of rebranding its CBS All Access streaming service into Paramount Plus and is ramping up production of original content to make it more attractive to consumer and competitive with Netflix.
Simon & Schuster expects to be managed as a separate publishing unit under Penguin Random House, with Jonathan Karp and Dennis Eulau continuing as president and CEO and COO and CFO, respectively.
The deal is expected to close in 2021.
LionTree Advisors is acting as the exclusive financial advisor and Shearman & Sterling LLP is acting as legal advisor to ViacomCBS in this transaction.
