Paramount scraps deal to sell Simon & Schuster to Penguin after weeks after judge rejected merger

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From CNBC:

Paramount Global said Monday it scrapped its $2.2 billion deal to sell book publisher Simon & Schuster to rival Penguin Random House, weeks after a federal judge rejected the merger.

Penguin, which is owned by German media conglomerate Bertelsmann, said it still believes Simon & Schuster is a good fit for its business, but that it accepted Paramount’s decision.

“We believe the judge’s ruling is wrong and planned to appeal the decision, confident we could make a compelling and persuasive argument to reverse the lower court ruling on appeal,” Penguin said in a statement Monday afternoon. “However, we have to accept Paramount’s decision not to move forward.”

Paramount’s decision to pull the plug on the deal came more than a year after the Justice Department sued to block the deal, saying it would hurt competition for books in the publishing world. On Halloween, after a trial that included testimony from bestselling horror author Stephen King, U.S. District Court Judge Florence Y. Pan on Halloween ruled against the deal, delivering a major victory for the Biden administration’s antitrust agenda.

King, who writes books for Simon & Schuster, said he was “delighted” by the ruling. “The proposed merger was never about readers and writers; it was about preserving (and growing) PRH’s market share. In other words: $$$,” he tweeted.

In its announcement Monday, Paramount said Penguin is on the hook for a $200 million termination fee.

Paramount also indicated that it would still seek to unload Simon & Schuster.

Link to the rest at CNBC and thanks to J. for the tip.

Commentary:

Part 1: Yes, this is the actual CNBC headline. PG checked it on Grammarly, expecting a mild digital uproar over the two “afters”, but Grammarly simply suggested that “judge” and “merger” needed appropriate articles.

Part 2: PG wonders if either side of this deal has decided to move to a different law firm, at least for antitrust matters. In PG’s enormously outsized opinion, this deal screamed of antitrust problems from the first time he read about it and the screaming never stopped until the District Judge put an arrow in its heart.

Of course, there’s no appeal because each party finally consulted adult antitrust lawyers, who likely delivered the news that the case was a loser up and down the legal line and had been since the start.

Part 3: If PG had a financial interest in Penguin, PG would scream bloody murder over a $200 million termination fee. Which officer of Penguin approved this provision? Did the board of directors actually vote to put Penguin on the hook for a busted deal that was dodgy from the very beginning?

Part 4: PG assumes that someone at Bertelsmann, the sole owner of Penguin, approved this transaction. Surely, someone in Gütersloh or several someones in this small German city will be sending out the German equivalent to resumes, résumés or resumés to the entire world.

(PG just learned that the German word for this sort of document is Lebenslauf. Apparently Lebenslauf doesn’t have versions with accent marks.)

Part 5: How are the Mohn family and the managers of various Mohn stiftungs that really own and control Bertlesmann feeling these days? PG doesn’t know whether $200 million is pocket change for these folks or not. He hasn’t looked up the German translation for “You’re Fired!” but expect there is an equivalent term. (He did learn that the German term for “Hit the road!” is Sich auf den Weg machen! or simply, Losfahren!)

(PG apologizes if there is supposed to be an upside-down exclamation point anywhere in all this German. He wasn’t exactly certain how to look that up.)