Paramount Skydance (PSKY) M&A Announcement summary

Deal rationale and strategic fit

• $8 billion investment merges Skydance into Paramount, creating "New Paramount" as a next-generation media and technology leader leveraging both companies' IP, technology, and creative capabilities.

• The combined entity aims to unify marquee franchises, expand into animation, sports, interactive, and gaming, and drive growth through cross-platform content.

• Skydance brings a robust financial profile, innovative technology, and proven content creation and cost discipline.

• The merger is designed to stabilize and strengthen Paramount, preserve its legacy, and foster innovation and job security.

• Leadership team combines creative and operational expertise, with David Ellison as Chairman/CEO and Jeff Shell as President.

Financial terms and conditions

• Skydance merges into Paramount at a $4.75 billion equity value in an all-stock transaction; Skydance equity holders receive 317 million Class B shares at $15/share.

• Skydance Investor Group invests $2.4 billion to acquire National Amusements and $4.5 billion for merger consideration to public shareholders, plus $1.5 billion in primary capital for Paramount's balance sheet.

• Non-NAI Paramount Class A shareholders can elect $23 cash or 1.53 Class B shares; Class B shareholders can elect $15 cash or 1 share, with $4.5 billion total cash available to public shareholders.

• Skydance Consortium receives 200 million Class B warrants with a $30.50 strike price.

• The deal values New Paramount at an enterprise value of approximately $28 billion.

Synergies and expected cost savings

• Over $2 billion in run-rate cost efficiencies targeted, representing about 7% of the pro forma cost structure, with more than half expected in the first year.

• $1.2 billion of synergies projected for 2026, $1.6 billion for 2027.

• Aggregate restructuring and integration costs to achieve the plan are $1.6 billion, impacting cash flow but not EBITDA.

• Synergies expected from unified IP, production, and technology platforms, and expansion into animation and gaming.

• The combined entity aims to deliver greater cash flow growth and balance sheet flexibility.