Paramount-Skydance Merger Approved After Seven Months of Talks – What’s Next for Hollywood’s Newest Powerhouse?

Los Angeles, CA – Skydance Media, owned by David Ellison, has reached a significant milestone in its acquisition deal with Paramount Global’s controlling shareholder, National Amusements Inc. Following seven months of negotiations, a special committee of Paramount’s board has approved the proposed acquisition. The full board is now set to review the proposal, with a formal announcement expected on Monday.

While representatives from NAI, Paramount, and Skydance have not yet commented on the matter, one notable feature of the agreement is a 45-day “go-shop” provision that allows NAI chief Shari Redstone to entertain alternative offers from potential bidders such as Apollo Global Management, Barry Diller, and Edgar Bronfman Jr.

Under the terms of the agreement, Redstone and her family are slated to receive $1.75 billion, with additional funds allocated for Paramount debt repayment. This transaction is anticipated to be the first phase of a two-part process, leading to a complete merger between Skydance and Paramount Global. With NAI currently controlling nearly 80% of Paramount’s Class A shares, the complex negotiations have been influenced by the notable difference in voting versus equity ownership.

Skydance’s longstanding partnership with Paramount Pictures, spanning major franchises like Mission: Impossible and Star Trek, positions the company favorably to take over a portfolio including CBS, Nickelodeon, and Paramount+. Unlike other potential bidders seeking to dismantle the company, Skydance aims to maintain its current structure, albeit with significant cost-cutting measures.

The recent progress in negotiations follows a period of uncertainty when Redstone abruptly backed out of a previous deal in June. Despite challenges posed by the pandemic and industry shifts, Paramount has been exploring various M&A scenarios while undergoing significant internal restructuring, including the recent appointment of a tripartite Office of the CEO.

As the company prepares for potential leadership changes and further downsizing, stakeholders are cautiously optimistic about the future trajectory of Paramount Global under Skydance’s stewardship. Amid ongoing industry transformations and competitive pressures, industry observers are closely monitoring the outcome of this high-profile acquisition deal.