ViacomCBS Nears Deal To Sell Simon & Schuster For $2B To Penguin Random House Parent

ViacomCBS Inc (NASDAQ: VIAC) is in the advanced stages of finalizing an agreement to sell its book publishing subsidiary, Simon & Schuster, for $2 billion. The Wall Street Journal reports that German media company Bertelsmann SE & Co, the parent of Penguin Random House, could be the final suitor.

What Happened: The Journal said that the sale’s cash proceeds would be used to further ViacomCBS’ streaming video business.

The sale of Simon & Schuster was in the pipeline since early March this year. WSJ owner News Corp (NASDAQ: NWSA) (NASDAQ: NWS) and French media company Lagardere SCA (OTC: LGDDF) were also potential bidders at the time.

If the deal follows through, renowned authors like Stephen King, Bob Woodward, Dan Brown, and John Grisham would be housed under one roof.

Washington Antitrust Attorney and former Justice Department personnel, David Meyer, opines that the deal of this magnitude could draw federal scrutiny. The Journal quoted Meyer saying, “Their combined share would be sufficient to motivate a close look at the transaction.”

Why Does It Matter: Currently, Bertelsmann’s Penguin Random House is the leading publisher in the U.S., whereas Simon & Schuster ranks third. If the deal pulls through, the new publishing house would be accountable for one out of three books sold in the U.S.

Simon & Schuster was not the only unit considered for sale. In September, South Carolina headquartered Red Ventures acquired CNET Media Group from ViacomCBS for $500 million. Last year, CNBC reported ViacomCBS’ plans to dispose of the CBS New York headquarter building, “Black Rock,” to fund share repurchase. However, the company decided to suspend the sale in March.

Simon & Schuster had published ex-National Security Advisor John Bolton’s “The Room Where It Happened: A White House Memoir” in June.

Price Action: VIAC shares dipped 0.32% to $34.51 on Tuesday.

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