Nov 25, 2020 - Economy

ViacomCBS to sell Simon & Schuster to Penguin Random House for $2 billion

ViacomCBS said Wednesday it is selling book publishing behemoth Simon & Schuster to Penguin Random House, a subsidiary of German media giant Bertelsmann SE & Co., for $2.175 billion in an all-cash deal.

Why it matters: The deal brings together the biggest and third-biggest book publishers in the U.S., which means it could be met with antitrust scrutiny.

Details: The deal comes at a time in which book consumption is peaking during the pandemic.

  • Simon & Schuster has more than 30 publishing units across adult, children, audio and international, per ViacomCBS. Its portfolio includes authors like Stephen King, Doris Kearns Goodwin and Jason Reynolds.
  • Penguin is the largest book publisher in the country, having sold approximately 25% of all books in the country last year, per The Wall Street Journal. Its portfolio includes titles like former President Barack Obama's latest book, "A Promised Land," and Michelle Obama's memoir, "Becoming."
  • LionTree Advisors is acting as the exclusive financial adviser and Shearman & Sterling LLP is acting as legal adviser to ViacomCBS in the deal.

Between the lines: Reports surfaced earlier this month that News Corp’s HarperCollins Publishers, the second-largest book publisher in the U.S., was also interested in a potential deal. The deal would make HarperCollins a distant second in size to a combined Simon & Schuster and Penguin Random House company.

The big picture: ViacomCBS announced last year that it was looking to sell the nearly 100-year-old book publisher as a part of a greater effort to offload non-core assets and focus on streaming. The company is also hoping to resume the sale of CBS’s Manhattan headquarters building, known as Black Rock, after the pandemic.

What's next: The transaction is expected to close in 2021 subject to regulatory approvals.

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