08 July 2024 , 15:21
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End to Redstone family’s involvement in media group, which also owns CBS, Nickelodeon and the UK’s Channel 5
Paramount Global, one of Hollywood’s best-known companies, has agreed to a merger with the independent film studio Skydance, in a deal that ends its links with the Redstone family.
The Paramount chair, Shari Redstone, whose father, Sumner, bought the company in 1994, has given the green light to the sale of the family’s controlling stake in the company behind classic films such as The Godfather, Titanic and Breakfast at Tiffany’s.
Paramount also owns the television network CBS and channels including MTV, Nickelodeon and the UK’s Channel 5.
The deal, which values the company at $28bn (£22bn), brings an end to more than six months of negotiations.
Skydance has agreed to invest $8bn into the new company as part of the merger deal. Skydance will then pay a further $2.4bn to buy National Amusements, the Redstone-owned theatre movie operator that holds nearly 80% of voting shares in Paramount.
The agreement comes four years after the death of Sumner Redstone, whose company Viacom bought Paramount Pictures three decades ago in a deal worth $10bn.
Shari Redstone had pulled the plug on advanced talks with Skydance Media last month. National Amusements, her company, said the two sides had been unable to reach mutually acceptable terms.
Last week, however, Skydance and Redstone were said to have reached a preliminary deal.
Skydance, the production group, is led by the producer David Ellison, the son of Larry Ellison, the tech tycoon who co-founded Oracle. It assembled a consortium of investors to buy National Amusements, and then merge with Paramount.
Paramount and Skydance have partnered on several recent big releases, including Top Gun: Maverick, Mission: Impossible – Dead Reckoning and Star Trek Into Darkness.
The deal is backed by several private equity firms, including RedBird Capital Partners, which walked away from a joint bid with the UAE government to buy Telegraph Media Group in April, saying new legislation meant the acquisition was “no longer feasible”.
Redstone said: “Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king.
“Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.
“As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”
Ellison said: “I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount.
“We are committed to energising the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”