Simon & Schuster owner Paramount Global has called off the deal to sell the publisher to competitor Penguin Random House.
The deal to sell Simon & Schuster to Penguin Random House (part of global publishing juggernaut Bertelsmann) was announced in November 2020, but hit a regulatory roadblock when the U.S. Department of Justice sought to block the merger under the antitrust Clayton Act a year later. Last month, Jude Florence Pan of the U.S. Court of Appeals issued a ruling in the case, blocking the $2.175 billion (U.S.) proposed merger which she said in her decision “is likely to substantially lessen competition.”
In a filing to the U.S. Securities and Exchange Commission on November 21, Paramount Global said it had terminated the agreement. Penguin Random House will have to pay Paramount a $200 million termination fee.
In announcing the terminated agreement, Paramount implied that Simon & Schuster is still for sale.
“Simon & Schuster remains a non-core asset to Paramount, as was determined in early 2020 when Paramount conducted a strategic review of its assets,” the filing says. “Simon & Schuster is a highly valuable business with a recent record of strong performance; however, it is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”
In a note to its staff worldwide on Monday, Simon & Schuster president and CEO Jonathan Karp said he didn’t have any information about what they could expect in the coming months but that he would keep staff informed in a timely manner.
“I am grateful for your patience and dedication to our mission during all that has transpired over these many months since the sale began. Ultimately, what matters the most is the work we do together, on behalf of our authors and our books,” Karp said in the letter. “Over the past three years, we have reached new heights of accomplishment. Simon & Schuster has never been more profitable and valuable than it is today. And that is because of the effort, ingenuity, and perseverance that you bring to our endeavours.”