Paramount reportedly reaches ‘tentative’ deal to merge with film company Skydance

Shari Redstone, the majority shareholder of Paramount Global, has reportedly reached a tentative deal to sell her stake in the company to Skydance Media.

Skydance is a production company and has partnered with Paramount’s film division on “Mission: Impossible Dead Reckoning,” “Transformers: Rise of the Beasts” and “Top Gun: Maverick.” 

Skydance was founded by David Ellison, the son of Larry Ellison, the billionaire co-founder of Oracle, who reportedly has met with the Paramount board about the deal. 

Paramount has been the subject of interest by other media companies, including Warner Bros. Discovery. Allen Media Group also offered $30 billion for the company in what was largely considered a speculative bid. Apollo Global Management also followed with its own $26 billion offer for the company, which Paramount’s board did not accept.

Should a deal between Skydance and Paramount solidify, there would also need to be a separate agreement to handle the merger of the company’s film studio division.

The deal could be further complicated because of National Amusements Inc.’s controlling voting interest in Paramount Global. NAI owns about 10% of Paramount but controls approximately 80% of its voting shares.

As it stands, the deal could put Paramount’s value at around $38.8 billion. 

Skydance also has expanded its business into television, video games and sports, so acquiring Paramount, which would include CBS and cable networks such as Nickelodeon and MTV, could represent a significant step in its growth and breadth. 

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Redstone, who inherited her share in Paramount after her father, Sumner Redstone, died in 2020, has reportedly been looking to boost the company’s value and sell it as one piece rather than split it into divisions.

Paramount has faced financial challenges, including mounting debt that resulted in S&P Global downgrading it to junk territory. Its streaming business has been a particular sore point in analysts’ eyes.

Skydance is backed by KKR and RedBird Capital, along with Chinese conglomerate Tencent and South Korean giant CJE ENM.