After months of back-and-forth, Paramount Global (PARA) and privately held Skydance Media have agreed to merge, creating an enlarged Hollywood film and television studio.
While financial terms were not disclosed, Shari Redstone, Paramount’s non-executive chair, has agreed to sell her family’s controlling stake in one of Hollywood’s oldest film studios.
Paramount Global currently operates the Paramount Pictures film studio, Paramount+ streaming service, CBS television network, and specialty TV channels such as Comedy Central and MTV.
Paramount also owns classic films such as “Chinatown” and “The Godfather,” as well as franchises that include “Indiana Jones” and “Transformers.”
Skydance Media has partnered with Paramount on several recent hit films, including “Top Gun: Maverick” and “Mission: Impossible Dead Reckoning.”
However, the merger comes at a difficult time for Paramount Global, which has struggled with the pivot to streaming content, particularly its legacy television business.
In recent earnings reports, Paramount has said that its traditional television business has declined faster than its streaming service could become profitable.
Since the start of this year, Paramount had ousted chief executive officer (CEO) Bob Bakish, announced $500 million U.S. in cost cuts, and sold off multiple assets.
The merger announcement ends months of wrangling between Paramount and Skydance, with previous negotiations abruptly called off on June 11 of this year.
Several other companies had also been circling Paramount Global in recent months, including Seagram heir Edgar Bronfman and IAC (IAC) Chair Barry Diller.
According to media reports, Shari Redstone agreed to a deal with Skydance Media after the company said it will pay $1.75 billion U.S. for her controlling stake in Paramount.
Skydance is also reportedly injecting $1.5 billion U.S. in Paramount Global and buying 50% of Paramount’s nonvoting shares for $15 U.S. a share. Holders of Class A voting stock will receive $23 U.S. a share.
The deal also reportedly gives Paramount Global 45 days to find a better offer, leaving open the potential for more drama surrounding this entertainment deal.
Paramount Global’s stock has declined 27% over the last 12 months and currently trades at $11.81 U.S. per share.
