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Paramount, Skydance Reportedly Agree to Merger Deal Terms: Details

Reports are that Paramount and Skydance have agreed on the terms of a merger deal - with an announcement possibly coming this week.

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Despite a recent competing offer from Apollo Global Management and Sony Pictures, all signs are pointing to a merger between Paramount and Skydance. Earlier today, CNBC's David Faber reported that both sides have agreed on the terms of a merger – with an announcement expected within the next few days. Reportedly, the next step is for National Amusements owner Shari Redstone – Paramount's controlling shareholder (with 77% of Class A Paramount shares) – to sign off the the deal between the company and David Ellison's Skydance (alongside private equity firms RedBird Capital and KKR). Though Paramount is set to have its annual shareholders meeting this Tuesday, June 4th, one thing that won't be on the agenda is a vote on the deal – with that aspect removed during negotiations.

Paramount
Image: Paramount Global, Skydance

Experts say the deal has a value of approximately $8 billion—a significant increase from Skydance's previous offer of approximately $5 billion. Here's how CNBC sees the specifics: Redstone would receive $2 billion for National Amusements. In turn, Skydance would purchase close to 50% of Class B Paramount shares – reportedly at $15/share ($4.5 billion) – which leaves the holders with equity in the new company that takes shape. In addition, $1.5 billion in cash will go from Skydance and RedBird Capital to Paramount to help reduce its debt. Once the deal is finalized and the dust has settled, Skydance and RedBird Capital will be the proud owners of two-thirds of Paramount – with Class B shareholders controlling the other third.

The news comes after weeks of rumors, speculation, and more. Apollo and Sony had been in the mix for some time—even putting a $26 billion offer on the table in early May of this year. Reportedly, Redstone favored Skydance for its willingness to keep Paramount whole, with Apollo and Sony reportedly eyeing breaking up the company in their deal. How this will impact the programming side of Paramount still remains to be seen – with additional details expected this week should the deal be announced.

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Ray FlookAbout Ray Flook

Serving as Television Editor since 2018, Ray began five years earlier as a contributing writer/photographer before being brought onto the core BC team in 2017.
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