Hollywood Icon Paramount Agrees $28bn Merger Deal

Mon Jul 08 2024
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NEW YORK, USA: Paramount Global, one of Hollywood’s oldest companies, has agreed to merge with Skydance Media, an independent film studio.

Under the agreement, Shari Redstone, Paramount’s non-executive chair, will sell her family’s controlling stake in the company, creating a new entity valued at approximately $28 billion (£21.9 billion). For the Redstone family, whose late patriarch Sumner Redstone built a network of drive-in theaters into a sizable media empire that encompasses CBS, Comedy Central, Nickelodeon, and MTV, this signifies the end of an era.

Ms. Redstone stated, “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.” Paramount’s television networks reach over 4.3 billion subscribers across more than 180 countries.

The merger will unite Paramount, known for classic films like Chinatown and Breakfast at Tiffany’s, with Skydance, which has financially partnered on recent hits such as Top Gun: Maverick and Star Trek Into Darkness. As part of the deal, Skydance will invest approximately $8 billion in Paramount, including a $2.4 billion payment for National Amusements, which controls the group. Despite owning only 10% of Paramount’s shares, National Amusements holds nearly 80% of the voting rights. The transaction is expected to close by next summer.

Paramount Global, tracing its roots to the founding of Paramount Pictures Corporation in 1914, has produced numerous iconic films, including The Godfather, Star Trek, and Mission: Impossible. However, the company has faced challenges, with its shares dropping over 75% in the past five years. Skydance, owned by David Ellison, son of Oracle founder Larry Ellison, has been negotiating with several potential partners, including Sony and Apollo, over the past eight months.

The deal follows the departure of Paramount’s CEO Bob Bakish in April, after disagreements with Ms. Redstone regarding the Skydance merger. This merger comes amid the global entertainment industry’s transformation driven by the video-streaming revolution.

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