Penguin Random House’s $2.2 billion deal for Simon & Schuster is over

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CNN Business

Paramount has ended its deal to sell Simon & Schuster to Penguin Random House and will not appeal a recent federal court ruling blocking the publishers’ merger.

Penguin, a subsidiary of German media giant Bertelsmann, is required to pay Paramount, the parent company of Simon & Schuster, a $200 million cancellation fee, according to a Paramount SEC filing. The proposed $2.17 billion deal was announced in November 2020.

In late October, US District Court Judge Florence Pan ruled that the combination of the book publishing giants would unlawfully lessen competition. The Justice Department had sued about a year ago to stop the merger, one of the first major antitrust actions by the Biden administration.

In a statement, Paramount said it is still looking for buyers.

“Simon & Schuster is a very valuable business with a recent track record of strong performance,” Paramount said in a statement. “However, it is not video-based and therefore does not fit strategically into Paramount’s broader portfolio.”

Jonathan Karp, president and CEO of Simon & Schuster, said “the news is still fresh” in an email to staff obtained by CNN Business. “And at this point I don’t have any specific information to release what will happen in the coming months.”

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

Penguin Random House and Simon & Schuster are among the “Big Five” of major US book publishers.

– CNN Business staff contributed to this report

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