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Paramount to merge with Skydance to create new $28B media, tech conglomerate

Paramount Global, the owner of Paramount Pictures, CBS television, Comedy Central, Nickelodeon and MTV has accepted a $8 billion takeover bid from U.S. independent film, animation and gaming production company Skydance. Photo by John Angelillo/UPI

July 8 (UPI) -- Paramount Global, the owner of Paramount Pictures, CBS television, Comedy Central, Nickelodeon and MTV said Monday it had accepted a $8 billion takeover bid from U.S. independent film, animation and gaming production company Skydance.

A special committee of the Board of Directors of the NASDAQ-listed Paramount Global confirmed that after a six-month search for a buyer, it had unanimously approved a merger agreement between Paramount and Santa Monica, Calif.,-based Skydance Media, Paramount said in a news release.

The merger agreement does include a 45-day "go-shop" clause for the special committee and its representatives to actively solicit and consider alternative acquisition proposals for the 110-year-old Hollywood studio, maker of blockbusters such as The Godfather, Star Trek and Mission Impossible.

Under the agreement, Skydance which is owned by David Ellison, son of Oracle founder Larry Ellison, and RedBird Capital, will inject around $8 billion into Paramount, including paying $2.4 billion for parent company National Amusements and $1.5 billion in capital to create "New Paramount," billed by Skydance as "a next-generation media and technology leader."

The all-stock deal will see holders of Paramount class A shares receive $23 per share in cash or stock, or a combination of both, and class B shareholders receive $15 per share in cash or stock, with the total cash amount capped at $4.5 billion.
Skydance equity holders will receive 317 million class B shares valued at $15 per share.

"We are pleased to have reached an agreement that we believe delivers to Paramount stockholders both immediate value and future upside opportunity. Following extensive negotiations with Skydance, we believe this proposed transaction will position Paramount for success in a rapidly evolving industry landscape," said Paramount Director Charles E. Phillips Jr., on behalf of the committee.

"Upon closing, it will deliver immediate cash consideration at a premium to both the minority Class A and Class B stockholders, who will also benefit from what we believe to be considerable upside through continued equity participation in New Paramount."

The deal, which will also see the Redstone family sell its controlling stake in the company, values the new company at around $28 billion and marks the end of their nearly four decades of involvement from Sumner Redstone's 1987 acquisition of Paramount predecessor Viacom.

Skydance said the deal secured a prosperous future for Paramount in which it planned to "enhance and reinvigorate Paramount's marquee" brands with a new next-generation team at the helm led by David Ellison as Chairman and Chief Executive Officer and Jeff Shell as president.

"New Paramount will be a creative-driven destination for storytellers dedicated to delivering top-quality content," said the company.
"Paramount's premier content platform to be enhanced and powered by best-in-class technology and modernized infrastructure offering scalability and ingenuity focused on delivering content through wholly-owned DTC platforms of Paramount+ and Pluto while enhancing CBS and Paramount's linear networks."

The merger partners the maker of classics including The Ten Commandments, White Christmas and Breakfast at Tiffany's with its collaborator on new big-name releases such as Top Gun: Maverick and Star Trek Into Darkness.

07 July 2024

Skydance-Paramount Merger Deal

After months of talks, Paramount Global and Skydance Media officially announced a deal to merge Sunday night.

Financial Times

43 minutes ago

Paramount agrees Skydance merger in end to Redstone era

Shari Redstone Tells Paramount Employees Skydance ‘Has a Clear Strategic Vision for the Future’; Co-CEOs Say in Memo ‘It’s Business as Usual’ for Now

Cheeks, McCarthy and Robbins say they will continue carrying out their restructuring plan, including layoffs and asset sales

Variety

an hour ago

Shari Redstone, Paramount Co-CEOs on Skydance Deal: Read the Memos

Shari Redstone, non-executive chair of Paramount Global and its controlling shareholder through National Amusements Inc., addressed the pact in a memo to employees, as did the trio of co-CEOs currently leading the company: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon. (Read the memos below.)

Yahoo

an hour ago

Paramount and Skydance just agreed to a takeover. But media's messiest deal isn't over yet.

In her memo, Redstone referred to her late father, Sumner Redstone, who assembled the pieces of what became Viacom and Paramount Global:

“Our family has always been committed to continuing my Dad’s legacy and ensuring Paramount’s enduring success. Consistent with that, as the pace of change in the industry has continued to accelerate, it has been our responsibility to work with leadership to make changes in order to maintain our competitive position and fuel growth, thinking of both the near and longer term.”

The deal is expected to close in the first half of 2025 — and until then, the co-CEOs told employees in their own memo, “it’s business as usual.”
The current plan under Cheeks, McCarthy and Robbins includes layoffs and other measures aimed at achieving upwards of $500 million in annualized costs; selling assets to pay down debt; and pursuing a joint venture to scale up Paramount+ and accelerate its turn to profitability.