Paramount and Skydance move closer to merger as major obstacle approaches

Paramount Global and Skydance Media are on the verge of finalizing a deal that would merge the two media companies and buy out controlling shareholder Shari Redstone. The negotiations between Paramount Global’s special committee and David Ellison’s Skydance Media, backed by private equity firms KKR and RedBird Capital Partners, are progressing smoothly as they work towards valuing Skydance’s assets and determining the equity structure of the merged entity.

Sources familiar with the matter revealed that Skydance is set to be valued at around $5 billion and will be merged with Paramount Global. The deal will involve raising approximately $4.5 billion to $5 billion in new equity, with a significant portion allocated to paying off Redstone and reducing debt. The buyers are aiming to finalize the deal by May, although discussions have been slightly delayed due to Paramount Global’s slow opening of a data room for the Skydance consortium.

Skydance plans to appoint David Ellison as CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as president, leading to the departure of current Paramount CEO Bob Bakish. Meanwhile, Apollo and Sony have also expressed interest in acquiring Paramount Global, but the special committee is leaning towards Skydance’s offer due to its potential for future growth and maintaining the company’s public status.

One major obstacle that remains is Paramount Global’s renewal agreement with Charter Communications for CBS and its cable networks, which could impact the company’s value. The deadline for this agreement is April 30, just before Paramount Global’s first-quarter earnings report on April 29. Despite the challenges ahead, both Paramount Global and Skydance are optimistic about the potential merger and the opportunities it could bring for both companies.