Paramount & Skydance Clinch Merger Deal

Paramount Global and Skydance Media have formally announced a merger deal, with the new combined entity to be run by David Ellison as chairman and CEO and Jeff Shell as president.

The all-stock transaction values Skydance at $4.75 billion. Skydance Investor Group, comprised of the Ellison family and RedBird Capital Partners, will invest $2.4 billion to acquire parent company National Amusements for cash and $4.5 billion for the stock/cash merger consideration, with $1.5 billion of primary capital to be added to Paramount’s balance sheet.

The focus will be on improving profitability, fostering creative pacts and upping investment in fast-growing digital platforms via the combination of Skydance’s financial resources, operating experience and expertise in cutting-edge technology with Paramount’s IP, film and television library and linear and streaming platforms.

Shari Redstone, chair of Paramount Global and chair, president and CEO of National Amusements, noted: “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.”

David Ellison, founder and CEO of Skydance, said: “This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy. I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

Gerry Cardinale, founder and managing partner of RedBird Capital, added: “The recapitalization of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation. As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution—but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.”

The deal includes a 45-day go-shop period in which Paramount’s board special committee can actively solicit and evaluate alternative acquisition proposals.