Paramount’s $28 Billion Merger Agreement with Skydance

On July 7, 2024, Paramount Global (“Paramount”), a leading global media, streaming and entertainment company, and Skydance Media (“Skydance”), a diversified media company founded to create high-quality, event-level entertainment for global audiences, announced that they have entered into a definitive agreement to form “New Paramount,” a next-generation media and technology leader, through a two-step transaction including the acquisition of National Amusements, Inc. (“NAI”), which holds the controlling share stake in Paramount, and subsequently a merger of Skydance and Paramount. Under the terms of the agreement, which has been approved by the Paramount Board of Directors, acting on the unanimous recommendation of the Special Committee of independent directors, and by NAI, Skydance will merge with Paramount in a transaction valuing New Paramount at an enterprise value of approximately $28 billion. Existing Skydance investors will receive 317 million newly issued Class B shares in New Paramount valuing Skydance at $4.75 billion based on $15 per Paramount Class B share. The Skydance Investor Group will invest up to $6 billion in offers to Class A and Class B stockholders, and use the additional capital to paydown debt and re-capitalize the balance sheet of New Paramount. NAI and its owners have entered into a definitive agreement to sell NAI to Skydance IG for $2.4 billion on a cash-free, debt-free basis. Cravath is representing the Paramount Special Committee in connection with the agreement.

The Cravath team is led by partners Faiza J. Saeed, Daniel J. Cerqueira and Claudia J. Ricciardi and includes associates Alexander E. Greenberg, Carol S. Lin, Katharine E. Waldman, Natan Sebhat, Danielle A. Solaru and Juan P. Castaño and foreign associate attorney Moritz Evertz on M&A matters; partner Andrew J. Pitts and associate Kelly N. King on capital markets matters; partner George E. Zobitz and associate Kathryn Kennedy Bleday on banking matters; partner Lauren Angelilli and associates Carlos Nicholas Obando and Carolyn Liziewski on tax matters; partner Jonathan J. Katz and associate Anna Mikaelyan on executive compensation and benefits matters; partners Christine A. Varney and Noah Joshua Phillips, of counsel Nicole M. Peles and foreign associate attorney Aleine Obregón on antitrust matters; partner David J. Kappos and associates Carys J. Webb and Sarah R. Brathwaite on intellectual property matters; partner Matthew Morreale and associate Star S. Gulant on environmental matters; partner Benjamin G. Joseloff on CFIUS matters; and senior attorney Joyce Law and practice area attorney Lauren Piechocki on real estate matters. Oscar Porter also worked on executive compensation and benefits matters and Kenya Rowser worked on intellectual property matters.