Frontlist | Penguin Random House to Buy Simon & Schuster
ViacomCBS agreed to sell the 96-year-old company in a deal that potentially creates a megapublisher.
The biggest book publisher in the United States is about to get bigger. ViacomCBS has agreed to sell Simon & Schuster to Penguin Random House for more than $2 billion in a deal that will create the first megapublisher.
Penguin Random House, the largest book publisher in the United States, is owned by the German media conglomerate Bertelsmann. Adding Simon & Schuster, the third largest publisher, would create a book behemoth, a combination that could trigger antitrust concerns.
The deal announced on Wednesday includes provisions that would protect ViacomCBS in the event that a sale is squashed by authorities. Bertelsmann would pay what is known as a termination fee if the deal does not go through.
The sale of the company will profoundly reshape the publishing industry, increasingly a winner-take-all business in which the largest companies compete for brand-name authors and guaranteed best-sellers.
The book business has seen wave after wave of consolidation in the past decade, with the merger of Penguin and Random House in 2013, News Corp’s purchase of the romance publisher Harlequin, and Hachette Book Group’s acquisition of Perseus Books. This fall, Houghton Mifflin Harcourt announced it was exploring a sale of its trade publishing division, and could be an attractive target for a large publishing company like Macmillan or Hachette.
Simon & Schuster, which publishes prominent authors like Stephen King, Don DeLillo, Bob Woodward, Doris Kearns Goodwin and Walter Isaacson, had long been rumored to be the next big company to be put up for sale, and it made an attractive prize for larger publishing houses seeking to grow through acquisitions. It has a vast backlist of more than 30,000 titles.
Founded in 1924 by Richard L. Simon and M. Lincoln Schuster, the company began as a publisher of crossword puzzles. It eventually grew into a sprawling company with more than 30 publishing units, and a backlist of literary treasures like the works of Ernest Hemingway and F. Scott Fitzgerald, Henry James and Edith Wharton.
The past year has been tumultuous for Simon & Schuster. In March, it was put up for sale, just as the first wave of the coronavirus pandemic hit, destabilizing the economy and forcing bookstores to close, hobbling a major sales channel. In May, Carolyn Reidy, the company’s beloved chief executive, died suddenly, and was later replaced by Jonathan Karp, who was formerly the publisher of Simon & Schuster, the company’s flagship house among dozens of imprints. The company also faced lawsuits from the Trump family and administration, as the president tried and failed to prevent the publication of books that were critical of him, by John Bolton and Mary L. Trump.
The company had a profitable year, in spite of such hurdles. Revenue grew to $649 million through September, an 8 percent increase, and profit before tax rose by 6 percent to $115 million.