Paramount pulls offer to sell Simon & Schuster to Penguin Random House
Paramount Pictures announced its offer to sell Simon & Schuster to News Corp.’s HarperCollins in a deal reportedly worth more than $1 billion.
As part of the deal, Paramount will sell its 50 percent interest in Simon & Schuster to New York-based HarperCollins, which will merge with the New York-based publishing giant — publisher of The New York Times, The Wall Street Journal, and Harper’s Magazine — and in which Paramount holds the sole share of the company. The deal will be completed in the fourth quarter of 2019 after the completion of approvals by U.S. governmental agencies.
Paramount and HarperCollins announced the deal to the music, publishing, and entertainment industries just before the Grammy Awards on Sunday, where Paramount’s “Mission: Impossible – Fallout” was nominated for three awards.
“Together, we are the first in a new era of storytelling in entertainment,” Paramount chairman Brad Grey said in a press release. “We have great respect for the power of this publishing industry, the incredible people who drive the creative process, the incredible writers who create the best books around the world — all of whom are part of this company.”
The deal reportedly includes a $200 million up-front payment and about $500 million on average in annual payments over a 15-year period.
“As creative executives, both of our companies share a passion for storytelling, which is at the core of Paramount’s business and HarperCollins’,” said HarperCollins chairman Bruce Canfield. “And we are confident that when it comes to the publishing industry, which thrives on bold creativity and invention, we are in the right place at the right time.”
For the deal to be finalized, the companies will also have to complete U.S. regulatory approvals and licenses with both the Federal Trade Commission and the Securities and Exchange Commission, according to a separate press release from Paramount. It was also reported that the companies are in talks with Facebook about sharing creative control of the Paramount App.
The deal is the latest in a string of strategic and creative deals at the top of the entertainment industry which have brought about an overall consolidation of the creative industry.
