Skydance Media to merge with Paramount Global in $8 billion deal

If the deal is approved, David Ellison will assume Chairman-CEO of Paramount, while Jeff Shell will take on the role of President.

8 JUL 2024

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Skydance Media has set a deal with Paramount Global that positions David Ellison to become chairman and CEO of an expanded Paramount, while former NBCUniversal CEO Jeff Shell will take on the role of President. The three-way transaction will take Paramount, CBS and the former Viacom assets out of the Redstone family’s control for the first time in decades. The transaction still requires regulatory approval, partially because the deal involves Paramount Global’s television stations, which trigger the involvement of the FCC. Skydance and its partners will invest more than $8 billion in an effort to reinvigorate aspects of the company. Skydance said the deal has an enterprise value of $28 billion, with Skydance itself valued at $4.75 billion.

Shari Redstone, chairman of Paramount’s parent company National Amusements Inc., announced the agreement in a statement: “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”

The deal is expected to close by the first half of 2025. If the deal is completed, the transaction will leave Skydance with 70% of the equity in Paramount and ownership of all Class A shares.

As part of the deal, Paramount Global will have the right to shop around for matching or superior offers for a 45-day period before completing the deal with Skydance. The newly engaged partners sought to downplay that option, which is designed to provide Redstone cover for lawsuits from common shareholders. A previous iteration of the Skydance-Paramount deal that broke down last month offered less advantageous terms for shareholders not named Redstone.

Under the new agreement, Skydance and its private equity partners including RedBird Capital vow to invest $6 billion to reinvigorate the company that owns Paramount Pictures, CBS, Nickelodeon, Paramount+ and numerous other studio and content assets. The new deal offers common shareholders about $15 a share, 48% premium to where the stock has traded in recent days and about $2 more than the previous pact. Redstone will receive $2.4 billion for her preferred voting shares, held by National Amusements, that give her 77% of the voting power in the company compared to about 10% of its equity. Skydance, RedBird and others will also kick in more cash to help tame Paramount Global’s significant $14 billion-plus debt load.