(New York) Skydance Media studio will merge with the Paramount Global media group and its shareholders will take control of the new entity, for an investment of more than eight billion dollars.
The announcement, made in a press release published by these two American companies on the night of Sunday to Monday, puts an end to several months of negotiations for Paramount.
Not having enough size to compete with video-on-demand giants like Netflix, Disney or Amazon, Paramount was looking for a partner.
The merger is a major step for Skydance Media, which is relatively unknown to the general public. The studio has produced several installments of the saga Impossible mission.
Skydance shareholders will acquire National Amusements, Paramount’s controlling holding company, for $2.4 billion in cash.
National Amusements owns less than 10% of Paramount’s capital, but has 77.4% of the voting rights.
Skydance will also merge with Paramount and its shareholders will receive 317 million new Paramount shares.
Skydance investors, including the Ellison family, including Oracle co-founder Larry and his son David, who runs the studio, will then buy back some of the remaining shares for $4.5 billion.
Following the transaction, they will control approximately 70% of the shares in the merged group, according to the press release.
The investor group, which also includes investment firm RedBird Capital Partners, has also committed to providing $1.5 billion in cash to the new group to strengthen its financial position.
The two groups estimate the value of the new company at $28 billion once the merger is completed.
David Ellison will take over as chairman of the merged entity, which will retain the Paramount name, and former NBCUniversal boss Jeff Shell will serve as CEO.
An ad hoc committee formed to study Skydance’s proposal recommended Sunday that Paramount’s board approve the transaction, which is expected to close in the first half of 2025.
The agreement with Skydance, however, provides for a 45-day period during which the committee can study other offers of acquisition or merger with Paramount.
According to several American media outlets, a consortium composed of Sony and the investment company Apollo Global Management had made an offer valuing Paramount at 26 billion dollars, before withdrawing in May.
Formerly known as ViacomCBS, Paramount controls CBS, MTV, Nickelodeon and Comedy Central, as well as the Paramount+ streaming service and the Paramount film and television studio.
In pre-market electronic trading on the New York Stock Exchange, Paramount shares were up 2.12%.