Republished with full copyright permissions from The San Francisco Press.

If you’re an avid follower of this column, you may vaguely remember the significant legal clash that took place in 2021 when the Justice Department intervened to prevent publishing industry powerhouse Penguin Random House from acquiring its competitor, Simon & Schuster. This marked the first major antitrust action of the Biden administration, with Attorney General Merrick Garland personally opposing the merger on the grounds of potential negative consequences for authors and consumers.

Penguin Random House, not willing to let go of its $2.2 billion deal, vehemently opposed the DOJ’s antitrust suit. Lead attorney Dan Petrocelli asserted that bringing the Simon & Schuster imprints into their structure would result in significant efficiencies, increased book sales, reduced consumer prices, and improved compensation for authors.

However, despite their confidence, Penguin Random House’s ambitions were ultimately thwarted when a federal judge ruled against the acquisition. The deal was declared dead, although Penguin Random House still faced the prospect of a $200 million termination fee to Paramount Global, the parent company of Simon & Schuster.

Nevertheless, the market remained interested in Simon & Schuster’s potential. HarperCollins, another major player among the Big Five publishers owned by Rupert Murdoch’s News Corp, expressed an interest in acquiring the company. Paramount, for its own reasons, continued to pursue the sale of Simon & Schuster.

Although Paramount reported significant financial losses, Simon & Schuster was not to blame, instead maintaining strong sales in a cooling book market for the past two years. Despite being a profitable publisher with an illustrious 99-year history and an impressive roster of renowned books and influential authors, Simon & Schuster did not align with Paramount’s focus on video entertainment.

Subsequently, on August 7, Paramount announced the sale of Simon & Schuster to KKR, a prominent private equity firm, for a cash deal of $1.62 billion. KKR has assured that Simon & Schuster will retain its editorial independence as a standalone entity. Furthermore, KKR has emphasized its commitment to expanding and investing in the organization, ensuring job security without any immediate plans for layoffs.

Unlike the previous thwarted acquisition by Penguin Random House, KKR’s purchase is less likely to face resistance from the Justice Department, as KKR is not a direct competitor in the publishing industry. While KKR typically holds companies for a period of five to seven years before selling, there is no set timeline for reselling Simon & Schuster.

Although private equity acquisitions may raise concerns among those affected, both Simon & Schuster employees and readers have been reassured by the efforts made to address their anxieties. At this stage, it appears to be a win-win situation, with KKR’s acquisition opening up new possibilities and avenues for growth.

In summary, the battle for Simon & Schuster saw the demise of the Penguin Random House deal and the rise of a new contender in the form of KKR. The future of Simon & Schuster as a standalone entity holds promise, with KKR’s commitment to bolstering and expanding the organization. As the publishing industry continues to evolve, only time will tell what lies ahead for this esteemed publisher.