Paramount Global In Deal To Merge With Skydance Media

(RTTNews) - Paramount Global (PARA, PARAA) and privately held Skydance Media announced late Sunday their agreement to merge in an all-stock transaction, to form New Paramount.

Under the deal terms, Skydance will merge with Paramount in a transaction valuing New Paramount at an enterprise value of around $28 billion.

The two-step transaction includes the acquisition of National Amusements, Inc. or NAI, which holds the controlling stake in Paramount, and subsequently a merger of Skydance and Paramount Global.

The consummation of the transaction is not subject to any financing condition. Completion of the deal is subject to regulatory approvals and other customary closing conditions. The transaction is anticipated to close in the first half of 2025.

In the deal, NAI, which holds around 77 percent of the Paramount Class A shares, has agreed to the transaction. No further stockholder approval is required.

Paramount Class A Stockholders will receive $23 per share in cash/stock election, and Class B Stockholders will receive $15 per share in cash/stock election.

Existing Skydance investors will receive 317 million newly issued Class B shares in New Paramount valuing Skydance at $4.75 billion based on $15 per Paramount Class B share.

The merger consideration represents a 48 percent premium to the price of the Class B stock as of July 1, and a 28 percent premium to the Class A stock on the same date.

Skydance Investor Group, comprised of the Ellison Family and RedBird Capital Partners, will invest over $8 billion in New Paramount and to acquire NAI.

Skydance IG will invest $2.4 billion to acquire NAI for cash and $4.5 billion for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount's balance sheet.

Following the deal closure, Skydance Investor Group will own 100 percent of New Paramount Class A Shares and 69 percent of outstanding Class B shares, or approximately 70 percent of the pro forma shares outstanding.

New Paramount will be led by David Ellison, the founder and Chief Executive Officer of Skydance, as Chairman and Chief Executive Officer and Jeff Shell as President.

Following the deal closure, only Skydance IG will hold Class A shares. Class B stockholders will own around 30 percent of the outstanding equity of New Paramount and Skydance IG will own approximately 70 percent of the outstanding equity of New Paramount.

By continuing to own shares of the new combined company, Paramount Class B stockholders will have the opportunity to participate in the new company's long-term value creation potential.