Skydance acquires Paramount’s controlling stake in two-step deal

Skydance Media and Paramount Global decided to merge, the parties announced late on Sunday, scripting a new chapter for one of Hollywood’s oldest studios.

Acquisition and Merger Process

Skydance, along with its deal partners, has agreed to acquire National Amusements, the company holding the Redstone family’s controlling stake in Paramount, for $2.4 billion in cash. This is the first step in a two-phase process.

Following this acquisition, Skydance will merge with Paramount, offering $4.5 billion in cash or stock to shareholders and injecting an additional $1.5 billion into Paramount’s balance sheet.

Market Reaction

Following the announcement, shares of CBS broadcast network owner Paramount rose more than 4% in pre-bell trading.

The deal marks a significant shift for Shari Redstone, whose father, Sumner Redstone, built a media empire from a chain of drive-in movie theaters, incorporating Paramount Pictures, CBS, and cable networks like Comedy Central, Nickelodeon, and MTV.

Also read: APPLE APPROVES EPIC GAMES’ MARKETPLACE APP IN EUROPE

“Given the changes in the industry, we want to fortify Paramount for the future, while ensuring that content remains king,” said Shari Redstone, chair of Paramount and National Amusements, in a statement, echoing her father’s famous phrase.

Combining Forces

The merger will unite Paramount, the studio behind classics like “Chinatown,” “The Godfather,” and “Breakfast at Tiffany’s,” with Skydance, which has partnered with Paramount on recent hits such as “Top Gun: Maverick,” “Mission: Impossible – Dead Reckoning,” and “Star Trek Into Darkness.”

David Ellison, founder of Skydance and son of Oracle co-founder Larry Ellison, will become chairman and chief executive of the new Paramount. Jeff Shell, former CEO of NBCUniversal, will take on the role of president.

Paramount’s Challenges

David Ellison inherits a media company facing significant challenges in an industry transformed by streaming video. Paramount has lost nearly $17 billion in value since late 2019 as its traditional television business has declined faster than its Paramount+ streaming service has been able to turn a profit.