Skydance and Paramount agree on a merger deal… almost

The Future. It seems Paramount Global has given Skydance (and its RedBird, KKR, and Oracle backers) the green light for a merger that would install the billionaire movie producer David Ellison as its new figurehead. The deal could be announced as early as today at Paramount’s shareholder meeting. If the agreement is approved, expect Ellison to quickly secure a number of A-list talent deals that could foreshadow the new creative direction for the company.

Blockbuster deal
David Ellison’s long-dreamed takeover of Paramount might finally come true this week.

• A newly reported offer ups the payment for majority shareholder Shari Redstone’s National Amusements (which owns 77% of class A shares) from $2 billion to $5 billion.
• Skydance and Redbird will also buy out 50% of class B shareholders at a 30% premium and will pay off $1.5 billion of the company’s debt.
• When the deal closes, Paramount would then acquire Skydance to complete the merger — that step just got the approval from Paramount’s independent directors.
• Shari Redstone, the final word on if the deal goes through, has signaled that she’ll sign off on it as long as the directors approve.

If completed, the deal represents an end that Hollywood creatives can get behind after a twisty negotiation process. Amid Skydance’s courtship, Sony and Apollo Global Management tried to scoop up all of Paramount Global with an enticing (at least to class B shareholders) $26 billion bid.

But Redstone, whose father built up Paramount Global, didn’t want to see her legacy squeezed and sold in parts. In Skydance CEO Ellison, Redstone would pass the baton to someone who sees Paramount as she does — a major player worthy of brand investment.