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Paramount signs off on merger with David Ellison’s Skydance

4 days ago 44

Paramount Global will merge with Skydance Media, capping months of twist-and-turn negotiations and catapulting the storied entertainment company behind CBS, MTV and the “Top Gun” franchise into a new era.

Skydance will acquire National Amusements in a deal that values the Shari Redstone-led company — which has a controlling stake in Paramount — at $1.75 billion. It also plans to invest billions in the “New Paramount,” the companies announced Monday in a news release.

The deal comes as Paramount has been losing money in an attempt to establish itself in a competitive streaming market dominated by Netflix, Disney and a few others. It is grappling with $14.6 billion in long-term debt and has lost more than half its market value since 2019, even as it has continued to steer blockbuster hits such as 2022’s “Top Gun: Maverick.” In addition to CBS and MTV, it owns Showtime, Black Entertainment Television and Nickelodeon. Most recently, the company has ventured into animation and sports content.

“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,” said Skydance founder David Ellison, who will become chairman and CEO of the combined company. He said the new owners “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.”

Ellison, the son of Oracle billionaire Larry Ellison, founded Skydance in 2010, and the company quickly established itself as a force in Hollywood, helping produce works such as the Tom Cruise action films “Mission: Impossible — Ghost Protocol” (2011) and “Jack Reacher” (2012), along with “World War Z” (2013) starring Brad Pitt.


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The board spent more than six months considering various offers and counteroffers, with a previous attempt at a deal with Skydance falling apart just a few weeks ago.

In April, in the midst of the takeover battle, Paramount ousted CEO Bob Bakish and replaced him with an “Office of the CEO” consisting of three executives who lead some of the company’s key assets: CBS CEO George Cheeks; MTV, Showtime and Paramount Media Networks CEO Chris McCarthy; and Nickelodeon and Paramount Pictures CEO Brian Robbins. They’ve been tasked with slashing Paramount’s costs as the company tries to cut its debt.

Under the new, all-stock deal, Skydance is valued at $4.75 billion. Existing Skydance investors will receive 317 million Class B shares at $15 apiece. Paramount stock closed Monday down by more than 5 percent, at $11.19 a share.

It’s possible that a new buyer could still swoop in and acquire Paramount, as the deal approved Monday allows for a 45-day “go-shop” period during which alternative proposals can be considered. Other possible suitors include media mogul Barry Diller, whose digital media conglomerate signed nondisclosure agreements with National Amusements, seen as a prelude to dealmaking, according to a report in the New York Times.

The Wall Street Journal first reported news of a potential Skydance agreement last week.

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