NEW YORK (AP) — Simon & Schuster has been sold to the private equity firm KKR, months after a federal judge blocked its purchase by rival publisher Penguin Random House because of concerns that competition would shrink in the book market.
The private equity giant will buy Simon & Schuster for $1.62 billion in cash, said Paramount Global, the parent company of the storied book publisher. Paramount will use sale proceeds to pay down debt.
Simon & Schuster, whose authors include Stephen King, Colleen Hoover and Bob Woodward, is one of the so-called “Big Five” of New York publishing, with others including Penguin Random House, HarperCollins Publishing, Hachette Book Group and Macmillan. HarperCollins, owned by Rupert Murdoch’s NewsCorp, had reportedly been interested in buying Simon & Schuster.
“All of the executives at Simon & Schuster who met with KKR came away from those conversations impressed with the depth of KKR’s interest in our business and their commitment to helping us grow, thrive and become an even stronger company,” said Jonathan Karp, president and CEO of Simon & Schuster, in a statement Monday.
Late in 2020, Paramount had announced the sale of Simon & Schuster to Penguin Random House for $2.2 billion, a deal that would have made the new company by far the biggest in the U.S. But the Department of Justice, which under the Biden administration has taken a tougher stance on mergers compared to other recent presidencies, sued to block the sale in 2021.
After a three-week trial in the summer of 2022, with King among those opposing the merger, U.S. District Judge Florence Y. Pan ruled in the government’s favor, saying the DOJ had made “a compelling case that predicts substantial harm to competition.”
Paramount declined to appeal the decision, and instead renewed its efforts to sell Simon & Schuster, which next year marks its centennial. The company, founded in 1924 by Richard Simon and Max Schuster, has changed ownership a handful of times since being purchased by Gulf+Western in 1975.
The transaction is subject to regulatory approvals.