Skydance Media Agrees to Acquire National Amusements, Pursue Merger with Paramount Global

Skydance Media is reportedly in talks to purchase National Amusements and merge with Paramount Global, as per the Wall Street Journal. The agreement is preliminary and awaits review by a Paramount special committee. This development has triggered a 9% rise in Paramount shares in the after-hours trading, though both Paramount and National Amusements have not commented.

The entertainment industry is abuzz with the latest merger rumors. According to a recent report by the Wall Street Journal, Skydance Media is in talks to acquire National Amusements and merge with Paramount Global [1]. While the details of the agreement are still preliminary and awaiting review by a Paramount special committee, the potential deal has already triggered a significant reaction in the financial markets.

The merger, if successful, would bring together two prominent players in the entertainment industry. Skydance Media, founded by David Ellison, has made a name for itself in the production of blockbuster films such as "Top Gun: Maverick" and "Mission: Impossible - Fallout." Paramount Global, on the other hand, is a media conglomerate with a diverse portfolio of television networks, film studios, and streaming services.

The reported merger terms include a $2 billion payment to National Amusements, which is owned by Shari Redstone and holds a 77% stake in class A Paramount shares [1]. Skydance would also buy out nearly half of the class B Paramount shares at $15 each, valuing the transaction at approximately $8 billion [1]. Additionally, Skydance and its partners, RedBird Capital and KKR, would contribute $1.5 billion in cash to Paramount's balance sheet to help reduce debt.

The potential merger comes at a time when Paramount has been undergoing significant changes. In late April, Bob Bakish stepped down as CEO and was replaced by an "Office of the CEO" consisting of George Cheeks, CBS president and CEO, Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount, and a new chief financial officer [1].

The negotiations have not been without their challenges. Paramount and Skydance have been in discussions for several weeks, and the companies recently received a competing offer from Apollo Global Management and Sony Pictures [1]. However, it appears that the parties have reached an agreement, subject to review by the Paramount special committee.

It is important to note that no official announcement has been made yet, and the deal is still subject to approval. However, if the merger goes through, it would represent a significant shakeup in the entertainment industry and could have implications for the companies' competitors and consumers.

References:
[1] Faber, D. (2024, June 3). Paramount and Skydance agree to terms of a merger, CNBC. Retrieved from https://www.cnbc.com/2024/06/03/paramount-skydance-merger-deal-update.html