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Skydance Media and Paramount Global entered into a merger agreement on July 7, 2024, to form New Paramount at a value of $28 billion.
Under the agreement, Shari Redstone, Paramount’s non-executive chair, will sell the family’s controlling stake in the company through a complex transaction leading to a merger.
The merger will take place through a two-step process under which Skydance will acquire National Amusements for $2.4 billion in cash, followed by a merger into Paramount. Skydance will offer shareholders $4.5 billion in cash or stock and provide an additional $1.5 billion to strengthen Paramount’s balance sheet.
Skydance investors will receive 317 million newly issued Class B shares in New Paramount valuing Skydance at $4.75 billion based on $15 per Paramount Class B share (PARA).
Led by the Ellison Family and RedBird Capital Partners, Skydance will invest up to $6 billion, offering Class A stockholders (PARAA), excluding National Amusements, the choice of $23 per share or 1.5333 shares of New Paramount Class B stock, a premium of 12.36% from the stock’s last close. Class B stockholders will be offered $15 per share or one share of New Paramount Class B stock, with a cap if elections exceed $4.3 billion, representing a 27.01% premium from the stock’s last close.
The deal marks the end of an era for the Redstone family, whose late patriarch, Sumner Redstone, transformed their drive-in movie theater chain into a media empire encompassing Paramount Pictures, the CBS broadcast network, and cable channels like Comedy Central, Nickelodeon, and MTV.
The merger combines Paramount’s extensive library with Skydance, founded by David Ellison in 2010, known for recent projects such as “Top Gun: Maverick” and “Mission: Impossible – Dead Reckoning.”
Upon closing, David Ellison will assume the roles of Chairman and CEO, while Jeff Shell, Chairman of RedBird Sports & Media and former NBCUniversal CEO, will serve as President.
Skydance will hold 70% ownership in the new entity, with the remainder owned by Class B stockholders.
The deal also includes a 45-day Go Shop period from the Special Committee of the board to look for alternative bids for the company.
The Paramount-Skydance deal concluded months of discussions that had derailed when Redstone abruptly halted negotiations on June 11.
Although Skydance had been in talks for Paramount’s ownership from the start, other potential bidders for National Amusements had emerged, including independent Hollywood producer Steven Paul, Seagram heir Edgar Bronfman with backing from Bain Capital, and IAC (IAC) Chair Barry Diller.
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Editor’s Note: Baranjot Kaur contributed to this article