Hollywood Icon Paramount Agrees to Merger with Skydance Media

Paramount Global, one of Hollywood’s oldest companies, has agreed to merge with independent film studio Skydance Media.

Under the deal, Paramount’s non-executive chairman Shari Redstone will sell her family’s controlling stake in the company in a complex transaction that will create a new company worth about $28bn (£21.9bn).

It marks the end of an era for the Redstone family, whose late leader Sumner Redstone transformed a chain of drive-in cinemas into a vast media empire.

The group includes Paramount as well as television networks CBS, Comedy Central, Nickelodeon and MTV.

“We are hopeful that our transaction with Skydance will position Paramount for continued success in a rapidly changing environment,” Redstone said in a statement.

The company claims that its television channels have more than 4.3 billion subscribers in over 180 countries worldwide.

The merger brings together Paramount, the studio behind classic films such as “Chinatown” and “Breakfast at Tiffany’s,” with a financing partner behind recent blockbusters such as “Top Gun: Maverick” and “Star Trek Into Darkness.”

Under the agreement, Skydance will invest about $8 billion in Paramount, including paying $2.4 billion to National Amusements, which controls the group.

National Amusements owns just 10 percent of Paramount Group’s stock but controls nearly 80 percent of the voting power.

Paramount said it expects to close the deal by next summer.

Paramount Global’s origins date back more than a century, to 1914, when Paramount Pictures Corporation was founded.

The studio has produced many hit films, including “The Godfather,” “Star Trek” and the “Mission: Impossible” series.

But the entertainment giant has struggled over the past decade, with Paramount Global shares falling more than 75% over the past five years.

Skydance is owned by David Ellison, son of Larry Ellison, the founder of US technology giant Oracle.

The announcement comes after eight months of negotiations in which Redstone held talks with several potential partners, including Sony and private equity firm Apollo.

In April, Paramount Chief Executive Bob Bakish left the company after clashing with Mr. Redstone over a planned deal with Skydance.

The deal comes at a time when the video streaming revolution is transforming the global entertainment industry.

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