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Paramount and Skydance have jointly announced that after months of negotiations, the two companies now have a merger agreement in place. A deal was almost set in June before Paramount’s controlling interest shareholder, Shari Redstone, walked away from the agreement. But now, Redstone has signed off on a new deal that will leave Skydance in control of Paramount’s destiny.
This doesn’t mean that Skydance will automatically walk away with Paramount. The agreement gives Paramount 45 days to get a better offer than the $8 billion Skydance is planning to spend including $4.5 billion earmarked for Paramount’s public shareholders. As part of the deal, Skydance’s David Ellison will become the new chairman and CEO of Paramount. Former NBCUniversal executive Jeff Shell will become Paramount’s new President as well.
In a press release announcing the deal, Skydance promised investors that it will “reposition Paramount to improve profitability, foster stability and independence for creators, and enable more investment in faster growing digital platforms.” Usually, that means job cuts for the newly combined companies.
Pending regulatory approval from the U.S. government, the Paramount and Skydance merger could be completed as soon as next year. In the interim, both companies will remain independent entities.
