Viacom to Sell Educational and Reference Publishing Business to Pearson

Posted on May 18, 1998

Viacom Inc. announced that it has signed a definitive agreement to sell its educational, professional and reference publishing businesses to Pearson Plc., for $4.6 billion. Viacom will retain its consumer operations, including the Simon & Schuster name. Net after-tax cash proceeds from the transaction, which are estimated to be approximately $3.8 billion, will be used to repay debt. In a separate transaction, Pearson has agreed to sell the professional and reference publishing businesses to Hicks, Muse, Tate & Furst Incorporated for $1 billion.

Sumner M. Redstone, Chairman of the Board of Viacom Inc., said, "The highly successful sale of our educational, professional and reference publishing operations enables us to convert the extraordinary value of these businesses into a tangible benefit for our shareholders. This is an extremely significant step in our strategic goal to become an entertainment-driven enterprise with a strong balance sheet and significant free cash flow. We are particularly delighted to be selling our industry-leading educational operations to Pearson, an international media group with a long-standing commitment to education. Pearson understands the value of these businesses, and we are confident that they will continue to grow and develop the assets to their full potential."

Viacom's educational, professional and reference publishing businesses, which are part of Viacom's Simon & Schuster unit, comprise the world's largest educational and computer book publishers. Simon & Schuster also is the leading provider of technology-based instructional curriculum, and encompasses major operations in reference and business and professional publishing. The operations have combined annual sales of approximately $2 billion. The businesses include operations in 43 countries and leading elementary, high school and higher education imprints such as Allyn & Bacon, Prentice Hall, Silver Burdett Ginn, Globe Fearon and Modern Curriculum; pioneer technology-based learning companies such as Computer Curriculum Corporation, Educational Management Group and Invest Learning; major names in reference and business and professional publishing, including Macmillan, Que, Bureau of Business Practice, Jossey-Bass, Prentice Hall Direct, New York Institute of Finance and Appleton & Lange; and international publishing operations, including Simon & Schuster Asia, Simon & Schuster Latin America, Simon & Schuster Australia and Simon & Schuster Europe.