Hollywood icon Paramount agrees $28bn merger deal
One of Hollywood’s oldest companies, Paramount Global, has agreed to merge with the independent film studio Skydance Media.
As part of the deal, Paramount’s non-executive chair, Shari Redstone, will sell her family’s controlling stake in the company through a complex transaction that will create a new firm valued at approximately $28 billion (£21.9 billion).
This merger signifies the end of an era for the Redstone family, whose late patriarch, Sumner Redstone, transformed a chain of drive-in cinemas into a vast media empire.
In addition to Paramount, the group includes television networks CBS, Comedy Central, Nickelodeon, and MTV.
“Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment,” Ms. Redstone stated.
According to the company, its TV channels reach over 4.3 billion subscribers in more than 180 countries.
The merger will unite Paramount, known for classics like Chinatown and Breakfast at Tiffany’s, with Skydance, its financial partner on several recent major releases, including Top Gun: Maverick and Star Trek Into Darkness.
Under the agreement, Skydance will invest around $8bn in Paramount, including paying $2.4bn for National Amusements, which controls the group.
National Amusements owns just 10% of Paramount Group’s shares but accounts for almost 80% of its voting rights.
Paramount said it expected to close the deal by the summer of next year.
Paramount Global traces its origins back more than a century to the founding of Paramount Pictures Corporation in 1914.
The studio has made many hit films, including the Godfather, Star Trek, and Mission: Impossible series.
But the entertainment giant has struggled over the past decade. Paramount Global’s shares have fallen by more than 75% in the last five years.
Skydance is owned by David Ellison, the son of Larry Ellison, who founded US technology giant Oracle.
The announcement came after eight months of negotiations that saw Redstone holding talks with a number of potential partners including Sony and private equity firm Apollo.
In April, Paramount’s chief executive Bob Bakish left the company after clashing with Ms Redstone over the planned Skydance deal.
The deal comes as the global entertainment industry is being transformed by the video-streaming revolution.
