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Paramount Global will merge with Skydance Media in a two-step transaction guided by five law firms, the companies announced, ending months of negotiations that were the subject of rigorous speculation.

Paramount Global merges with Skydance Media : Transaction Details

Under the terms, Skydance has agreed to buy Paramount's parent company, National Amusements, for $2.4 billion in cash. After this acquisition, Skydance will merge with Paramount, the companies announced late Sunday. This merger of Paramount Global and Skydance Media is poised to reshape the entertainment industry landscape.

As part of the deal, Skydance Investor Group, which includes Skydance's Ellison family and RedBird Capital Partners, will offer $4.5 billion in cash or stock to shareholders and an additional $1.5 billion to Paramount's balance sheet, the statement said.

Paramount Global merges with Skydance Media : Leadership and Legal Teams

Skydance is led by David Ellison, the 41-year-old son of Oracle founder Larry Ellison. Ellison expressed his excitement about the merger, stating that this is a defining and transformative time for the industry.

Simpson Thacher & Bartlett LLP is representing Paramount Global. Latham & Watkins LLP is legal counsel to Skydance and the investor group. Sullivan & Cromwell LLP is advising RedBird. Ropes & Gray LLP is legal counsel to National Amusements Inc. Cravath Swaine & Moore LLP is legal counsel to a special committee of Paramount's board of directors.

Approval and Strategic Vision

The deal includes a 45-day "go-shop period" for other bidders to make offers, the statement said. The Paramount special committee of independent directors and Paramount's controlling shareholder, Shari Redstone, have approved the deal. Redstone controls Paramount through her stake in National Amusements.

"Given the changes in the industry, we want to fortify Paramount for the future, while ensuring that content remains king," Redstone said in a statement. "Our hope is that the Skydance transaction will enable Paramount's continued success in this rapidly changing environment."

Paramount Global merges with Skydance Media : Impact on the Entertainment Industry

The transaction will combine Paramount-owned CBS, MTV, and Nickelodeon with Skydance, an emerging movie studio with co-production credits on Paramount's "Top Gun: Maverick." Founded in 1912, Paramount Pictures has produced iconic films such as "Titanic," "The Godfather," "Forrest Gump," and the "Transformers" franchise.

David Ellison emphasized the significance of the merger: "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 energizing the business and bolstering Paramount with contemporary technology, new leadership, and a creative discipline that aims to enrich generations to come."

Competitive Bidding and Executive Changes

The deal ends months of speculation about a potential combination with Skydance. Competing offers included a joint venture between Sony and Apollo Global Management and a bid from media mogul Byron Allen, as well as earlier reported talks with Warner Bros. Discovery.

Last month, reports indicated that negotiations were halted because Redstone was not satisfied with the terms. The deal also follows a late April executive shakeup at Paramount that replaced CEO Bob Bakish with a new "office of the CEO," comprising three division heads: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon.

Paramount Global merges with Skydance Media : Legal Representation

• The Ropes & Gray team representing National Amusements includes partners Jackie Cohen, Emily Oldshue, Peter Welsh, Marty Crisp, Scott Pinarchick, Renata Ferrari, Byung Choi, Michael McFalls, Ruchit Patel, and Erica Han.
• The Sullivan & Cromwell LLP team representing RedBird is led by corporate partners Alison S. Ressler and Eric M. Krautheimer.
• The Cravath team representing the Paramount special committee is led by partners Faiza J. Saeed, Daniel J. Cerqueira, Claudia J. Ricciardi, Andrew J. Pitts, George E. Zobitz, Lauren Angelilli, Eric W. Hilfers, Jonathan J. Katz, Christine A. Varney, Noah Joshua Phillips, David J. Kappos, Matthew Morreale, and Benjamin G. Joseloff.
• The Latham team representing Skydance Media and the investor group includes partners Justin Hamill, Bradley Faris, Ian Nussbaum, Max Schleusener, Rick Offsay, Liliana Paparelli Ranger, Pardis Zomorodi, Katharine Moir, and Julie Crisp.
• The Simpson Thacher team representing Paramount Global is led by M&A partners Katherine Krause and Eric Swedenburg.