Mega book publisher Penguin Random House gets bigger with purchase of Simon & Schuster
Two of the biggest book publishing entities will now operate under one corporate roof.
A corporate behemoth in the book world was conceived on Wednesday with an announcement from ViacomCBS Inc. about plans to sell Simon & Schuster, the third largest publishing entity in the United States, to Penguin Random House, the No. 1 largest entity.
The sale comes with the price tag of $2.175 billion in cash and will bring both imprints under the German company Bertelsmann. ViacomCBS plans to use the money towards streaming, funding the dividend, paying down debt, and other "strategic growth priorities." The transaction is expected to close in 2021.
Simon & Schuster maintains more than 30 publishing units across the adult, children, audio, and international spaces. Stephen King, Doris Kearns Goodwin, Bob Woodward, and Jason Reynolds account for some of its notable authors. The company was put up for sale in March, as reported by The New York Times, while the first wave of the coronavirus pandemic hit the U.S. The imprint will continue to operate as a separate publishing unit under Penguin Random House.
It's a move that will no doubt drastically reshape the book publishing landscape. Approximately one-third of all books sold in America will now come from one corporation, Bertelsmann. And because the now-combined shares of Penguin Random House and Simon & Schuster are so high, the deal also raises antitrust concerns and may attract attention from the U.S. Justice Department.
Book sales have been on the rise this year, given the environment surrounding lockdowns and the pandemic. According to market researcher NPD Group, bread cookbooks and chess books — the latter a result of Netflix's The Queen's Gambit — specifically have been on the rise over the past few months. The firm also notes that about one-fourth of total book sales for the year are made during the holiday months.
In a statement given to Publisher's Weekly, Penguin Random House worldwide CEO Markus Dohle called it a "good day for books, book publishing, and reading."
"Simon & Schuster aligns completely with the creative and entrepreneurial culture that we nurture by providing editorial autonomy to our publishers, funding their pursuit of new stories, ideas, and voices, and maximizing reach for our authors," Dohle wrote in an email to employees, according to Publisher's Weekly. "We recognize — and our success has demonstrated — that collaboration makes us all stronger, and by bringing Simon & Schuster onto our global platform, we will be able to connect their authors and books with even more readers."