July 12, 2024
After approximately 8 months of negotiations, the sale of Paramount Global to Skydance Media has finally taken place. The two companies have worked together for more than 10 years and Skydance has wanted to consolidate the two brands for several years. The merger of the two Hollywood giants will cost up to $8.4 billion and will take place in two stages.
Paramount Global, owned by National Amusements Inc., the media empire of the Redstone family, has been in crisis for the past year. Falling share prices, weak earnings in successive quarters and heavy losses in the company's streaming division all played a role in CEO Bob Bakish's decision to step down. In addition, CNBC reported that Bakish was forced to resign because he opposed the merger.
Skydance was launched in 2006 and has been working with Paramount since 2009, supporting the production of blockbusters such as Terminator', 'Transformers' and 'Mission: Impossible'.
During the lengthy negotiations with Skydance Media, several other suitors emerged, including Warner Bros. Discovery (WBD), which was keen to buy Paramount Global. WBD reportedly had a very serious plan to buy Paramount+ and merge it with the Max service. Unfortunately, those plans ended there.
The entire process of combining the two companies is expected to take approximately eight months, with the plan and details of both phases was be announced by National Amusements Inc. Sheri Redstone. In Phase I, Skydance will acquire her company, which controls 80% of Paramount Global, at a cost of $2.4 billion in cash. Jeff Shell, formerly managing director of NBCUniversal, will take over as chief executive of Skydance Media.
Then, in Phase II, Skydance will begin to absorb Paramount by offering Paramount Global shareholders $4.5 billion in cash or notes and an additional $1.5 billion for the balance sheet. The combined company will begin operations in 2025 under the leadership of David Ellison, who has already announced that the key goals of the combined company will be to be transformational, focusing on new technologies, systematic investment in streaming platforms, creative stability, and the elimination of the now highly indebted Paramount studio debt.
Will the new combined company change its name? Will content really "reign supreme", as its bosses promise? We'll find out over the coming months.
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