Hollywood giant Paramount agrees $28 billion merger

Hollywood giant Paramount Global has agreed a 28 billion US dollar (£21.8 billion) merger with Skydance Media in a deal that brings together two of the world’s biggest film studios.

The deal will see Paramount’s non-executive chairwoman Shari Redstone sell her family’s controlling stake in the group, ending their involvement in the company founded by her grandfather in 1936.

Paramount is one of Hollywood’s oldest film studios, having produced cinema classics such as The Godfather, Titanic and Raiders Of The Lost Ark, as well as the Mission: Impossible series.

The group also owns television networks CBS, Comedy Central, Nickelodeon and MTV.

Skydance Media is an independent film studio launched in 2010 by billionaire David Ellison – the son of Oracle founder Larry Ellison.

It is backed by US private equity groups including RedBird Capital.

Skydance has produced blockbusters including Top Gun: Maverick, Star Trek Into Darkness, and Jack Reacher: Never Go Back.

Ms Redstone said: “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.”

The complex deal will see Skydance invest around $8 billion to take over Paramount.

It comprises a two-stage transaction, in which Skydance will pay $2.4 billion to buy National Amusements, which controls Paramount.

Skydance will then merge with Paramount.

The deal is set to close in the first half of 2025.

It comes after a lengthy and tumultuous process, which saw Ms Redstone hold talks with a raft of interested suitors, including Japanese tech firm Sony as well as private equity group Apollo.

A number of board members also left Paramount during talks amid reported disagreements with Ms Redstone.

Mr Ellison, founder and chief executive 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.”

Mr Ellison will become chairman and chief executive of the newly merged group, while former NBCUniversal boss Jeff Shell will become president.

The new bosses will be faced with the task of turning around Paramount’s heavily loss-making streaming business Paramount+ and bolstering the wider group’s flagging share price.

Russ Mould, investment director at AJ Bell, said: “In an era where streaming platform owners need to make a profit on their services, rather than letting losses build up in the quest to gain market share, Skydance will have to think long and hard about Paramount+’s future.

“Investors will also be hoping that Skydance can bring some new sparkle to the broader Paramount group, given how its share price performance has been truly miserable.”

Source: Press Association