After trying for three years, Paramount finally unloads Simon & Schuster for $1.6 billion

Paramount has agreed to sell Simon & Schuster to private equity firm KKR for $1.6 billion in cash, after more than three years of trying to offload the book publishing powerhouse.

"The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delivering our balance sheet," Bob Bakish, president and CEO of Paramount Global, said in a statement.

The book publisher will go private once the deal closes and will be led by Jonathan Karp, its current CEO and president, and Dennis Eulau, COO and CFO.

Paramount posted Simon & Schuster for sale in 2020.

In November 2022, Paramount ended its agreement to sell Simon & Schuster to Penguin Random House in what would have been a $2.2 billion deal.

Both are among the "Big Five" of major US book publishers - the potential deal raised antitrust concerns.

The Justice Department sued to stop the merger, one of the first major antitrust actions from the Biden administration. In October 2022, US District Court Judge Florence Pan ruled the combination of the book publishing giants would illegally reduce competition, arguing that the combination of the two book business giants would illegally reduce competition.

The lawsuit said the deal would have given the combined company too much control over how much authors are paid. It also argued there would be fewer bidders for highly anticipated books, which would have been another potential blow to writers.

Penguin was obligated to pay Paramount a $200 million termination fee, and Paramount said it wouldn't appeal the ruling blocking the merger.

Private equity firms have dipped their toes into the literary world before. In 2019, Elliott Management bought Barnes & Nobles for $683 million, after it was struggling to compete with Amazon for the past decade.

This is a developing story and will be updated.