KKR in talks to buy Simon & Schuster for $1.65 bln
KKR in talks to buy Simon & Schuster for $1.65 bln
KKR in Advanced Talks to Acquire Simon & Schuster from Paramount Global for $1.65 Billion
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In a surprising turn of events, private equity firm KKR & Co Inc is currently engaged in advanced talks to acquire book publishing powerhouse Simon & Schuster from Paramount Global. The deal, valued at a staggering $1.65 billion, is said to be nearing its conclusion, according to anonymous sources familiar with the matter. If successful, the acquisition could be announced in the coming days, marking a significant chapter in the publishing industry’s history.
KKR faced stiff competition from bidders such as News Corp-owned HarperCollins Publishers and investor Richard Hurowitz. However, the private equity giant seems to have emerged as the front-runner in this high-stakes battle. Paramount and KKR have declined to comment on the negotiations, while HarperCollins and Hurowitz have yet to respond to requests for comments. It was reported earlier by The Wall Street Journal that advanced talks were underway between KKR and Paramount.
This potential deal comes after Paramount’s previous attempt to sell Simon & Schuster to Penguin Random House for $2.2 billion fell through last year. A federal judge blocked the acquisition, derailing the plans of the media company. Seeking a second opportunity, Paramount decided to put Simon & Schuster back on the market, ultimately catching the attention of KKR.
One crucial factor that sets this potential deal apart from the failed Penguin acquisition is its lack of competition concerns with U.S. regulators. Last year, the U.S. Department of Justice sued to prevent the Penguin and Simon & Schuster merger on grounds of antitrust concerns. Combined, the two publishing giants would have accounted for nearly half of the market for publishing rights to blockbuster books. Fortunately, KKR’s acquisition of Simon & Schuster does not raise the same concerns and is less likely to face regulatory hurdles.
When the Penguin deal collapsed, Paramount received a breakup fee of $200 million, earning them a significant consolation prize for their efforts. However, this time around, it seems they are determined to seal the deal with KKR and secure a successful sale of Simon & Schuster.
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Simon & Schuster, known for publishing renowned authors such as Stephen King, Jennifer Weiner, and former U.S. presidential candidate Hillary Clinton, has a rich and diverse catalog. It enjoys a prominent position in the publishing industry and stands as a symbol of literary success. Notably, Stephen King himself testified in favor of the U.S. government’s lawsuit against the Penguin merger, underscoring the importance of competition and diversity in the publishing world.
In conclusion, the potential acquisition of Simon & Schuster by KKR is poised to make waves in the publishing landscape. With negotiations reaching an advanced stage, this deal not only signifies a new chapter for these industry giants but also highlights the complexities and competition within the world of book publishing. As the publishing industry undergoes continuous changes and adaptations to the digital age, it will be interesting to see how this acquisition unfolds and what it means for the future of Simon & Schuster and the wider publishing industry as a whole.
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