Paramount Global agrees to merger with Skydance

Hollywood studio Paramount Global parent National Amusements, Inc. has agreed to merge with Skydance Media to form New Paramount, less than a month after both sides called off talks.

Paramount, which owns the Paramount+ streaming service, Nickelodeon, MTV, Comedy Central and other brands, announced the merger with the entertainment business founded by David Ellison, son of Oracle founder Larry Ellison, in a deal that sets the combined entity’s value at $28 billion.

The deal concludes months of uncertainty regarding Paramount’s future, including drawing a $26 billion offer from a consortium including Sony Pictures and Apollo Global Management.

In the two-phase deal, Skydance will initially purchase National Amusements for $2.4 billion, taking control of 77% of Paramount’s voting shares. Non-voting shareholders will either receive $15 per share or a share in the new entity, the company said.

Class A shareholders, excluding National Amusements, will get $23 per share or 1.5333 shares in the merged entity. Subsequently, Paramount Global and Skydance will merge in a stock-only transaction, valuing Skydance at $4.75 billion.

This arrangement includes a 45-day period during which other potential buyers can make competing offers, ina bid to address investor concerns that Skydance’s offer was too low. Completion of the deal is contingent on regulatory approval.

David Ellison will serve as chairman and chief executive officer (CEO) of New Paramount, and Jeff Shell, chairman of RedBird Sports and Media, a unit of investment firm RedBird Capital Partners, will become president.

Shari Redstone, chair of Paramount Global and chair, president, and CEO of National Amusements, Inc. said, “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that “content was king” and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company.”

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will,” Redstone said.

Skydance offers Paramount state-of-the-art interactive and gaming proficiencies, including two in-house game developer studios with industry-leading franchises, such as Skydance’s upcoming console games in Marvel and Star Wars and hit VR game, ‘The Walking Dead,’ the company said in a statement.

David Ellison, founder and CEO of Skydance, said: “This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy. I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

Billionaire Mukesh Ambani-owned Reliance Industries Ltd had in March signed a deal to buy Paramount Global’s 13.01% stake in Viacom18 Media Pvt. Ltd for ₹4,286 crore, or about $517 million.

Paramount Global held its stake in Viacom18 Media, an arm of TV18 Broadcast Ltd, through two subsidiaries. TV18 Broadcast is a subsidiary of the Network18 Group that has interests spanning television, digital content, films, e-commerce and print businesses.

Paramount licenses its content to Viacom18, which runs 40 channels and is majority owned by Reliance, and streams its content on Reliance’s Jio Cinema.