German media giant Bertelsmann has set a deal with ViacomCBS to acquire publishing unit, Simon & Schuster, for $2.17 billion in cash.
Bertelsmann, the owner of publishing giant Penguin Random House, was seen as a logical contender for Simon & Schuster. ViacomCBS announced its intent to sell the publishing arm earlier this year as part of the company’s post-merger streamlining to focus on content investment.
Simon & Schuster will operate as a separate unit under the Penguin Random House umbrella. Jonathan Karp, president-CEO of Simon & Schuster, and Dennis Eulau, chief operating officer and chief financial officer, will continue to lead the division. The deal is expected to close next year.
ViacomCBS said it would use the proceeds from the sale to pay down debt, fund its dividend, and to invest in “strategic growth priorities.” ViacomCBS chief Bob Bakish in March told investors that Simon & Schuster had attracted interest from 25 bidders. Bertelsmann was believed to be the frontrunner from the start.
ViacomCBS put up Simon & Schuster, founded in 1924, for sale earlier this year as the entertainment company tries to sell off “non-core assets” to pay down debt, please shareholders with dividends and stock buybacks, and invest in streaming.
ViacomCBS owns cable networks Nickelodeon, MTV, BET, and Comedy Central as well as broadcast network CBS and movie studio Paramount. It is trying to navigate consumers’ shift from watching live TV on a television set to streaming shows and movies on the internet.