Paramount Global agrees to a merger with Skydance Media in an $8 bn deal

Paramount Global's shares witnessed an increase after the company announced late Sunday that its board had given approval to a takeover offer from Skydance Media. This decision put an end to months of speculation about the deal and charted a new course for the studio.

Under the terms, Paramount’s class A shareholders will receive $23 per share in cash or stock, while class B shareholders will receive $15 per share. The total cash payout to public shareholders amounts to $4.5 billion, with the entire transaction valued at over $8 billion.

The deal encompasses a $4.2 billion investment in Paramount by a consortium led by the Ellison Family and Redbird Capital, alongside an additional $1.5 billion in primary capital for the newly formed entity, known as New Paramount.

Ahead of the merger, Paramount's stock saw an increase of nearly 5% in premarket trading on Monday.

Post-transaction, Skydance will hold approximately 70% of New Paramount’s outstanding shares. The agreement involves Skydance acquiring National Amusements’ controlling interest in Paramount, granting Skydance access to Paramount’s studio assets, Paramount+ streaming service, and popular channels like Nickelodeon, MTV, and Comedy Central.

Paramount Global chair Shari Redstone expressed optimism about the deal, stating, “Our expectation is that the Skydance transaction will position Paramount for ongoing success in this rapidly evolving landscape.”

A special committee of Paramount’s board, established earlier this year to oversee the deal, gave its approval to the merger over the weekend.

The leadership of the newly formed entity will consist of David Ellison from Skydance as chairman and CEO, with former NBC Universal CEO Jeff Shell appointed as president.