Paramount Global to merge with Skydance Media in a billion dollar deal

Paramount Global, one of Hollywood's long-standing entities, has reached an agreement to merge with independent film studio Skydance Media.

In this deal, Shari Redstone, Paramount's non-executive chair, will sell her family's controlling interest in the company through a complex transaction. This merger is expected to create a new firm valued at approximately $28 billion (£21.9 billion).

This marks a significant transition for the Redstone family, whose late patriarch, Sumner Redstone, originally turned a chain of drive-in theaters into a sprawling media empire.

In addition to Paramount, the group comprises television networks such as CBS, Comedy Central, Nickelodeon, and MTV.

"Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment," Ms Redstone said in a statement.

The merger will unite Paramount, renowned for classic films like Chinatown and Breakfast at Tiffany's, with its financial collaborator on recent major releases such as Top Gun: Maverick and Star Trek Into Darkness.

As part of the deal, Skydance will inject approximately $8 billion into Paramount, which includes a $2.4 billion payment to acquire National Amusements, the controlling entity of the group.

Although National Amusements holds only a 10% stake in Paramount Group's shares, it commands nearly 80% of its voting power.

Paramount anticipates finalizing the merger by the summer of the following year.

Paramount Global can trace its roots back over a century to the establishment of Paramount Pictures Corporation in 1914.

The studio has produced numerous successful films, such as The Godfather, Star Trek, and Mission: Impossible franchises.

However, the entertainment powerhouse has faced challenges over the last decade, with Paramount Global's shares declining by over 75% in the past five years.