Historic paramount global to merge with skydance media in $28 billion deal

In a landmark move, Paramount Global, one of Hollywood's oldest companies, has agreed to merge with the independent film studio Skydance Media. This significant transaction, valued at approximately 28 billion dollar (£21.9 billion), involves the sale of the Redstone family's controlling stake in Paramount by Shari Redstone, the non-executive chair of the company.

Ms. Redstone expressed optimism about the deal, stating, "Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment."

Paramount's TV channels currently have a global reach of over 4.3 billion subscribers across more than 180 countries. The merger will see Paramount, known for classic films like "Chinatown" and "Breakfast at Tiffany's," join forces with Skydance, their financial partner on major releases such as "Top Gun: Maverick" and "Star Trek Into Darkness."

As per reports, Skydance will invest around 8 billion dollars in Paramount, including 2.4 billion dollars for National Amusements, which holds a controlling interest in Paramount Group despite owning only 10 percent of the shares. National Amusements wields nearly 80 percent  of the company's voting rights.

The merger is expected to finalize by the summer of next year. Paramount Global, which dates back to the founding of Paramount Pictures Corporation in 1914, has produced numerous hit films, including "The Godfather," the "Star Trek" series, and the "Mission: Impossible" franchise. However, the company has faced challenges in the past decade, with its shares dropping by over 75 percent in the last five years.

Skydance Media, owned by David Ellison, the son of Oracle founder Larry Ellison, will bring fresh investment and strategic direction to Paramount. The announcement follows eight months of negotiations, during which Shari Redstone held discussions with various potential partners, including Sony and private equity firm Apollo.

Earlier this year, Paramount's chief executive Bob Bakish left the company following disagreements with Ms. Redstone regarding the Skydance deal.

This merger occurs amid a transformation in the global entertainment industry, driven by the rise of video streaming services.