Skydance Media has officially entered into a definitive merger agreement with Paramount Global for a two-step transaction, following more than 10 months of negotiations.

The companies shared the announcement on Sunday night (July 7)—shortly after the special committee of Paramount’s board of directors gave their stamp of approval to the US$8-billion bid from Skydance and its private equity partner RedBird Capital.

The transaction will start with Skydance’s acquisition of Shari Redstone’s National Amusements (which holds a controlling share in Paramount), followed by a subsequent merger of Skydance and Paramount. The combined company (dubbed “New Paramount”) has also mapped out key leadership role assignments to take effect when the deal closes—Skydance CEO David Ellison (pictured) will become CEO/chairman, while ex-NBCU chief Jeff Shell will serve as president.

Breaking down the financing, Skydance Investor Group (which includes the Ellison family and RedBird Capital) will invest US$2.4 billion to acquire National Amusements for cash. There’s also a US$4.5-billion stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, plus US$1.5 billion in primary capital will be added to Paramount’s balance sheet.

The transaction is expected to close in the first half of 2025. No further stockholder approvals are required, but the deal is still subject to a few factors—regulatory approvals, closing conditions and a 45-day “go-shop” period that gives Paramount a limited window to evaluate any alternative offers. (In the scenario of a better bid coming through, Skydance will receive a US$400-million breakup fee.)

It’s been a rather bumpy road for the proposed merger, marked by months of negotiations and uncertainty, and reaching an apex last month when talks were seemingly called off at the last minute—but this renewed pact has addressed concerns stemming from non-voting Paramount shareholders hoping for a better deal. 

With things back on track, it remains to be seen how this merger—which puts key assets like Nickelodeon and Paramount Pictures in the hands of new ownership—will shake up the kids entertainment landscape. In an investor call this morning, Ellison and Shell reiterated that animation will be an anchor to fuel the “incredibly important” kids and family business, with much enthusiasm for a toon powerhouse bringing together Skydance Animation and Nickelodeon. 

The execs also confirmed that Skydance Animation will continue to execute the multi-year deal it signed last October to develop and produce feature films for Netflix, noting that its relationship with the streamer is poised to bolster Skydance’s family entertainment reach, starting with the upcoming feature Spellbound’s debut on Netflix this November. 

Ellison also referenced big plans to “transition New Paramount to a world-class media and technology enterprise” on the call. One of the priorities is strengthening Paramount+, which has 72 million subscribers after a decade in the market. Ellison and his team are eyeing significant tech improvements to attract more subscribers to the platform.