Paramount agrees to merge with Skydance

According to Coin World News, Paramount Pictures has agreed to merge with Skydance, ending a month-long negotiation that involved various twists and turns. This means that the Redstone family will give up control of the renowned film studio and media company. On Sunday, Paramount’s special committee approved the merger, following a preliminary agreement reached a few days earlier between Shari Redstone’s National Amusements, Paramount’s controlling shareholder, and Skydance. A previous deal a few weeks ago had been halted. In the latest round of negotiations, an acquisition consortium including Red Bird Capital Partners and KKR will invest over $8 billion in Paramount and acquire National Entertainment Corporation. This transaction values National Amusements at $2.4 billion, including $1.75 billion in equity. “This is a new Paramount, not just a catchphrase,” said Jeff Shell, former CEO of NBCUniversal and now a partner at Red Bird, during an investor conference call on Monday. “We believe this will be a new day for these merged assets.” Ellison will lead the merged company as CEO, while Shell will serve as President. The merger is subject to regulatory approval and includes a 45-day “go-shop” period in which Paramount’s special committee can solicit other bids. The completion of Skydance’s merger will mark a significant shift in ownership for Paramount and the entire Hollywood industry. The Redstone family has long controlled the movie studio known for films such as “The Godfather,” “Top Gun,” and “Forrest Gump,” as well as the CBS broadcast network and cable television networks including MTV and Nickelodeon. This merger will also place David Ellison, founder of production company Skydance and son of Oracle founder and billionaire Larry Ellison, at the helm of a major film studio, cementing his position among Hollywood elites. Paramount’s stock traded at around $12 per share in pre-market trading on Monday. The stock has been on a roller coaster ride due to the traditional media giant’s challenges in a weak advertising market and ongoing loss of cable TV subscribers. Its flagship streaming platform, Paramount+, has yet to turn a profit. Agreement reached In late 2021, Paramount began discussions with interested buyers, including Warner Bros. Discovery at the time. In addition to industry headwinds, Paramount carries nearly $15 billion in debt. Over the past few months, Skydance and Paramount have gradually come closer to reaching an agreement, during which Bob Bakish stepped down as Paramount CEO and was succeeded by three company leaders. The two parties initially agreed to terms in early June, but the deal was blocked by Redstone a week later. Shortly after, Paramount’s so-called “office of the CEO” – CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins – embarked on their plan to restructure the company by reducing debt and seeking streaming partnerships. In recent weeks, other interested bidders have emerged, including media mogul Barry Diller. Disclosure: NBCUniversal, a subsidiary of Comcast, is the parent company of CNBC.