Entertainment giant Paramount agrees to merge with Skydance

Entertainment giant Paramount, owner of CBS and behind hit films such as “Top Gun” and “The Godfather,” has agreed to merge with Skydance, the companies said.

The new combined company is valued at around $28 billion.

“Given the changes in the industry, we want to strengthen Paramount for the future while ensuring that content remains king,” said Shari Redstone, President, Paramount Global.

According to data firm FactSet, Redstone’s National Amusements owns more than three-quarters of Paramount’s Class A voting stock through the estate of her late father, Sumner Redstone. Shari Redstone had fought to maintain control of the company.

Santa Monica, California-based Skydance has helped produce some of Paramount’s biggest hits in recent years, including several Tom Cruise films such as “Top Gun: Maverick” and installments in the “Mission: Impossible” series.

Skydance was founded in 2010 by David Ellison, son of billionaire Larry Ellison, founder of software company Oracle. It quickly formed a production partnership with Paramount that same year.

David Ellison will be chairman and CEO of what will be called New Paramount. The deal still needs regulatory approval.

The merger, which has had its ups and downs, comes at a tumultuous time for Paramount, which at an annual shareholder meeting in early June laid out a restructuring plan that includes significant cost cuts. The company also underwent a management shakeup earlier this year.

Paramount has struggled in an ever-changing media landscape, particularly as its traditional cable business has declined. To capture today’s growing streaming audience, the company has struggled to capture the growing number of streaming companies in the U.S. Paramount+ launched in 2021but losses and debts have been accumulating over time.

Sumner Redstone He used National Amusements, his family’s movie theater chain, to build a vast media empire that included CBS and Viacom, which have merged and split several times over the years. Most recently, the companies joined forces again in 2019, undoing the split completed in 2006. The company, ViacomCBS, changed its name to Paramount Global in 2022.

Under Sumner Redstone’s leadership, Viacom became one of the nation’s media giants, home to the pay-TV channels MTV and Comedy Central and the film studio Paramount Pictures.

Skydance wasn’t the only one to make an offer to Paramount in recent months: Apollo Global Management and Sony Pictures also made competing bids. Late last year, Warner Bros. Discovery also made headlines for exploring a potential merger with Paramount. But by February, Warner had reportedly stopped those conversations.