Paramount Skydance (PSKY) M&A Announcement summary

Deal rationale and strategic fit

• $8 billion investment merges Skydance with Paramount, unifying marquee IP and franchise management to create a next-generation, tech-driven entertainment leader with deep creative, technology, and management expertise.

• The merger aims to expand into technology-driven media, animation, sports, gaming, and interactive entertainment, leveraging Skydance's technology and creative capabilities.

• The combined company will prioritize creativity, technology, and cash flow generation, positioning itself as a world-class media and technology enterprise.

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

• Leadership will combine creative and technological expertise, with David Ellison as Chairman and CEO and Jeff Shell as President.

Financial terms and conditions

• $8 billion total investment: $2.4 billion for National Amusements, $6 billion cash into Paramount, with $1.5 billion allocated to deleveraging.

• 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.

• Paramount Class A stockholders can elect $23 per share in cash or stock; Class B stockholders can elect $15 per share in cash or stock, with $4.5 billion total cash available to public shareholders.

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

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

Synergies and expected cost savings

• Over $2 billion in identified run-rate cost efficiencies and synergies, with more than half targeted for realization in the first year post-close.

• $1.2 billion of synergies expected in 2026, $1.6 billion in 2027, with $1.6 billion in one-time costs to achieve these savings.

• Synergies include operational integration, content, technology, and production efficiencies, with incremental cost take-out not materially impacting revenue.

• The merger will enable investment in growth initiatives, streamline operations, and transform Paramount's technology platform.

• Skydance's in-house animation and gaming talent will expand Paramount's capabilities and consumer product opportunities.