As we had long forecast, the higher central banks raise interest rates, the lower the Merger and Acquisition trend… which hit record highs at the height of the COVID War in 2021 when interest rates sank and governments pumped in countless trillions to artificially prop up sinking economies. 

And as we have continued to detail, it is important to understand that M&A activity will continue to slow down as interest rates remain high. But as economic conditions worsen there will be more corporate defaults. This will bring revenues of struggling companies down, making it cheaper for the “Bigs” to buy out those in economic distress. This in turn will continue to shrink the competitive landscape in many business sectors.

KKR BUYS BOOK PUBLISHER SIMON & SCHUSTER

Private equity giant KKR finalized its purchase of Simon & Schuster (S&S), the iconic publishing house, for $1.62 billion from Paramount, the global media empire that currently owns it.

Paramount has been shopping the publisher for months as part of a plan to streamline the company and raise cash to invest in expanding its online streaming service amid stiff competition from Disney+ and Netflix. 

“Simon Schuster is a fantastic asset, but it’s not core,” Paramount CEO Bob Bakish said during an earnings call.

Paramount’s stock price rose 4 percent after the company beat earnings estimates on the strength of its streaming business, Reuters reported.

Others who had expressed interest in S&S include publishing firm HarperCollins, owned by Rupert Murdoch, and a private investor funded by Abu Dhabi’s sovereign wealth fund, according to the Financial Times.

Penguin Random House had agreed to buy S&S in 2020 for $2.2 billion but regulators vetoed the combination on grounds that it would endanger competition in the industry.

Simon & Schuster was formed in 1924. Its first venture was a crossword puzzle book, the first of its kind, and was a blockbuster best-seller. Since then, the company has published renowned authors such as F. Scott Fitzgerald and Stephen King.

KKR owns, or holds significant stakes in, more than 100 companies around the world, including pipeline companies, biotech firms, and Adopt-A-Cow, a rapidly growing, direct-to-consumer dairy brand in China.