Paramount Global and Skydance Media have reached an agreement to merge and create a new company, New Paramount, with the deal expected to be finalized in the first half of next year. The merger, facilitated through a two-step transaction, will see Skydance acquiring National Amusements Inc. (NAI), which holds a controlling stake in Paramount Global, followed by the merger of Skydance with Paramount Global to form New Paramount. The new entity is anticipated to have an enterprise value of approximately $28 billion. The transaction is slated to be completed in the first half of 2025 pending regulatory approvals.
Shareholders of Paramount stand to benefit from a premium of 28 percent for Class A stock and 48 percent for Class B stock, based on the prices on July 1. The merger aims to create immediate value, potential growth opportunities, and stability for all Paramount shareholders and employees amidst industry changes, as stated in a press release.
The deal involves a 45-day “go-shop” period allowing Paramount Global to seek alternative acquisition proposals. Discussions regarding the transaction will be held with securities analysts on Monday.
Key transactions as part of the merger process include Skydance investing $2.4 billion to acquire NAI for cash, purchasing Paramount Global’s publicly traded Class A and Class B shares for $4.5 billion in cash and stock, and adding $1.5 billion to Paramount Global’s capital sheet. Subsequently, Skydance will merge with Paramount Global in an all-stock transaction to form New Paramount, with Skydance owning 100 percent of Class A and 69 percent of outstanding Class B shares, valuing Skydance at $4.75 billion.
Post-merger, Skydance CEO David Ellison will assume the roles of chairman and CEO of New Paramount, while Jeff Shell, former CEO of NBCUniversal, will serve as president.
Paramount, with a history of over a century, owns renowned media brands and has a global reach of more than 4.3 billion subscribers across 180 countries. The company has backed blockbuster films like “Mission: Impossible–Dead Reckoning,” “Top Gun: Maverick,” and “Transformers: Rise of the Beasts.” Skydance, established in 2010, has been involved in producing successful movies such as “Mission: Impossible–Ghost Protocol,” “World War Z,” and “Star Trek Into Darkness.”
The merger deal comes at a time when Paramount’s stock has witnessed a decline of over 27 percent in the past year and nearly 78 percent over five years. In light of weaker cash flows, rating agency S&P Global placed Paramount on negative credit watch, citing challenges related to declining pay-TV subscribers and shifting advertising spending to streaming platforms.
While some Paramount shareholders initially opposed the merger, expressing concerns about its impact on their interests compared to NAI, a special committee of Paramount’s board of directors eventually approved the merger agreement.
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