Paramount Agrees To Skydance Merger, Seemingly Ending Saga

Paramount Global (PARA) announced that it has agreed to terms to merge with Skydance Media, seemingly bringing an end to months of negotiations.

Shareholders can opt to receive $23 per Class A voting share they hold, or $15 per Class B share, which don't have voting rights. Skydance will pay $2.4 billion to acquire Shari Redstone's National Amusements, Paramount's controlling shareholder, then merge with Paramount, the companies said Sunday night.

Skydance, Partners To Spend Over $8 Billion on Deal

Skydance and RedBird Capital Partners, its private equity backer, will pay $2.4 billion for National Amusements, along with $4.5 billion set to be paid to Paramount shareholders. Skydance and RedBird will also invest $1.5 billion toward Paramount's balance sheet, which currently holds billions in debt, bringing the total amount of capital involved in the deal to about $8.4 billion.

Skydance plans to own all of the Class A voting shares by the time the transaction is closed, offering current shareholders the $23-per-share option, or the ability to exchange each of their shares for about 1.53 Class B non-voting shares of "New Paramount." The companies said that Class B shareholders will own about 30% of the company's outstanding equity, with Skydance owning the remaining 70%.

David Ellison To Become CEO of New Paramount

David Ellison, founder of Skydance and son of Oracle (ORCL) co-founder Larry Ellison, will take over as Chief Executive Officer (CEO) after the media conglomerate's previous chief executive, Bob Bakish, left earlier this year, with a three-person "office of the CEO" taking his place.

"I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount," Ellison said. "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.”

Paramount's board and National Amusements have approved the deal, sending the merger into a 45-day "go shop" period where other interested parties can make offers for Paramount to potentially improve upon Skydance's offer. Assuming no better offer emerges and the Skydance deal goes through, the companies said it is expected to close in the first half of 2025.

The deal brings to an end months of negotiations that included Paramount receiving offers from a number of companies and individuals from across media and private equity. Redstone reportedly called off a tentative deal last month before Paramount's board could vote on it, but the sides were said to be in negotiations again last week.

Paramount shares rose in premarket trading Monday but slipped 2.6% to $11.50 soon after markets opened. They are down about 22% since the start of 2024.