The cinematic world was abuzz with whispers of a potential bidding war, as rumors swirled about Paramount. But the commotion seemed to subside when multi-billionaire filmmaker David Ellison clinched the deal, as announced by Paramount on Monday. Edgar Bronfman Jr., the aspirant contender, decided to withdraw his rival offer. The anticipated merger with Ellison's production company, Skydance, is slated for the early part of 2025.
Bronfman had put forward a proposal valued at approximately $6 billion ($5.372 billion in current value) for Paramount last week. Ellison and his team, however, were planning to invest more than $8 billion for the acquisition.
Seizing control of Paramount might have seemed straightforward given its share structure. Over 75% of the voting shares are owned by current proprietor Shari Redstone. Securing her stake would have sufficed theoretically. But potential lawsuits from various shareholders, holding non-voting shares, could have emerged if they felt disadvantaged.
To bypass such legal hurdles, a strategic agreement was reached: Redstone was to receive $2.4 billion for her shares, while Paramount and Ellison’s Skydance Media would merge.
To acquire further shares from non-voting shareholders, Ellison, his family, and accompanying investors would contribute another $4.5 billion. They also promised to infuse $1.5 billion to reduce Paramount's debts.
Post-agreement completion, the young and dynamic Ellison is expected to assume the position of Paramount’s CEO. His father, Larry Ellison, is the billionaire visionary behind software conglomerate Oracle. Bronfman hails from the renowned Seagram spirit company’s dynasty and has served as CEO of Warner Music Group.
Paramount's Official Statement
The highly anticipated merger between David Ellison's Skydance and Paramount Global is set to be finalized in the early half of 2025, with Ellison potentially taking over as the new CEO. Speculations of a bidding war in Los Angeles seemed speculative at best, as the deal appeared to be predominantly driven by Ellison's lucrative bid.
[Bonus fact]: The acquisition process involving complex negotiations and agreements between Paramount, Skydance, and National Amusements had been a subject of interest for quite some time. In January 2024, David Ellison expressed interest in buying National Amusements, the parent company of Paramount Global, from Shari Redstone. However, the talks did not lead to a deal, as the window expired without any resolution.
[Another Bonus fact]: In June 2024, an independent committee representing Paramount recommended a revised offer from Ellison. The offer would see Skydance purchasing National Amusements for an estimated $2 billion. Negotiations, however, fell apart, leading to renewed talks on July 2, 2024.
[One last Bonus fact]: On July 2, 2024, Skydance reached a preliminary agreement to acquire National Amusements and merge with Paramount Global. However, details of the deal were not disclosed at the time.
[Final Bonus fact]: On July 7, 2024, David Ellison announced his intentions to take over Paramount Global in an $8 billion deal.
In this deal, a group of investors from Skydance paid $2.4 billion in cash to procure National Amusements. Non-voting shareholders of Paramount were also swayed to contribute further shares worth $4.5 billion.
Debts incurred by Paramount were reduced by $1.5 billion through an additional investment by Ellison, his family, and the accompanying investors.
Upon completion of the agreement, the 41-year-old Ellison is expected to ascend to the position of Paramount's CEO, with his father, Larry Ellison, serving as a significant backer.
