Paramount agrees to merge with Skydance

Paramount Global will merge with Skydance, capping off a months-long negotiation that included various twists and turns, and will see the Redstone family step away from control of the storied movie studio and media company.

Paramount’s special committee agreed to the merger on Sunday, days after Shari Redstone’s National Amusements, the controlling shareholder of Paramount, once again reached a preliminary agreement with Skydance. A deal had weeks earlier been stopped in its tracks.

The latest iteration of the deal will see the buying consortium invest more than $8 billion into Paramount and to acquire National Amusements. 

The merger is subject to regulatory approval. It also includes a 45-day “go-shop period,” in which the Paramount special committee can solicit other offers.

A completed Skydance merger would mark a major shift for the ownership of Paramount, as well as for Hollywood as a whole.

The Redstone family has long controlled the movie studio — known for films such as “The Godfather,” “Top Gun,” and “Forrest Gump” — as well as the CBS broadcast network and cable TV networks like MTV and Nickelodeon.

The merger will also put David Ellison, the founder of the production company Skydance and son of Oracle founder and billionaire Larry Ellison, at the helm of a major movie studio and among Hollywood’s elite.

Ellison will lead the combined company as CEO, while former NBCUniversal president Jeff Shell will serve as president.

Paramount’s shares were trading at roughly $12 per share premarket Monday.

The stock has been on a roller coaster in the last year as the legacy media giant faced a weak advertising market and the continued bleeding of cable TV customers. Its flagship streaming platform, Paramount+, is also yet to reach profitability.

Late last year Paramount began deal discussions with interested buyers, including, at the time, Warner Bros. Discovery. On top of the industry headwinds, Paramount is strapped with a hefty debt load of nearly $15 billion.

Skydance and Paramount inched closer to a deal in recent months, during which time Bob Bakish stepped down as CEO of Paramount and was replaced by a trio of company leaders.

The parties first agreed to terms of a deal in early June, only to see the deal stopped in its tracks by Redstone a week later.

Shortly after, Paramount’s so-called “Office of the CEO” — CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy and Paramount Pictures CEO Brian Robbins — set out on their plan to restructure the company by cutting debt and finding a streaming joint venture partner.

During recent weeks, other interested bidders have surfaced, including media mogul Barry Diller.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.