Paramount Global is set to merge with Skydance after months of negotiations, marking a significant shift in the entertainment industry. The Redstone family will step down from controlling the renowned movie studio and media company.
On Sunday, Paramount’s special committee approved the merger, just days after Shari Redstone’s National Amusements, Paramount’s controlling shareholder, reached a preliminary agreement with Skydance. A previous attempt at the deal had stalled weeks earlier.
The new agreement involves the buying consortium, including RedBird Capital Partners and KKR, investing over $8 billion into Paramount and acquiring National Amusements. This deal values National Amusements at $2.4 billion, including $1.75 billion in equity.
“It’s a new Paramount, it’s not just a catchphrase,” said RedBird’s Jeff Shell, former NBCUniversal CEO, during a call with investors on Monday. “We think it’s going to be a new day for these combined assets.”
David Ellison, founder of Skydance and son of Oracle founder Larry Ellison, will lead the combined company as CEO, with Shell serving as president.
The merger, which is subject to regulatory approval, includes a 45-day “go-shop period” allowing Paramount’s special committee to seek other offers.
This merger would represent a major change for Paramount and Hollywood as a whole. The Redstone family has long controlled Paramount, known for films like “The Godfather,” “Top Gun,” and “Forrest Gump,” as well as CBS, MTV, and Nickelodeon.
The merger will position Ellison at the helm of a major studio, elevating him to a key player in Hollywood.
As of Monday premarket trading, Paramount’s shares were around $12 per share. The stock has been volatile over the past year due to a weak advertising market and declining cable TV customers. Paramount+ has yet to reach profitability.
Last year, Paramount began discussions with potential buyers, including Warner Bros. Discovery. Paramount faces industry challenges and a significant debt load of nearly $15 billion.
Skydance and Paramount have been negotiating a deal for months. Bob Bakish recently stepped down as CEO of Paramount, replaced by CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins.
Other interested bidders have emerged recently, including media mogul Barry Diller.
