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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.