Sony and Apollo in Talks for Joint Bid to Acquire Paramount Amid Skydance Merger Negotiations

Sony Group Corp. and Apollo Global Management are in discussions to make a joint bid to acquire Paramount Global, even as Paramount conducts exclusive merger negotiations with Skydance Media. The potential deal would offer cash for Paramount's shares and take the company private through a joint venture, providing an alternative to the Skydance proposal.

According to people familiar with the situation, the terms of the potential Sony-Apollo joint bid are still being negotiated. The actual structure of the deal is unclear, but it could involve Sony contributing Sony Pictures Entertainment to the joint venture, with both companies providing cash to finance the transaction. If the bid is made and accepted, Sony is expected to become the majority owner and operator of Paramount, with Apollo taking a minority stake.

This development comes after Apollo had previously made a solo $26 billion offer to purchase Paramount, which was reportedly dismissed by Paramount's board due to concerns about Apollo's ability to complete the deal. Meanwhile, Skydance Media, led by David Ellison, reached a tentative agreement to buy Shari Redstone's controlling stake in Paramount and has been in exclusive talks with the company.

Why this matters: The potential bidding war for Paramount highlights the intense competition and consolidation in the media and entertainment industry. The outcome could significantly reshape the Hollywood landscape and have implications for Paramount's vast content library and streaming platform, Paramount+.

The Skydance deal has faced significant pushback from some Paramount investors who believe it would benefit the Redstone family more than regular shareholders. Paramount's class B shares rose as much as 14% in after-hours trading on the news of the potential Sony-Apollo bid, while Sony's stock slid 2%. Investor Mario Gabelli, who owns roughly half the non-Redstone voting shares in Paramount, has said he does not support either the Skydance or Apollo offers.

If the Sony-Apollo joint bid moves forward, it would likely address the financing concerns that led Paramount's board to reject Apollo's previous offer. The deal would mark a significant transformation for Sony, which has had a Hollywood presence for nearly 35 years through Sony Pictures Entertainment. It would also raise regulatory concerns, as it would eliminate one of the remaining major film studios in Hollywood.

Key Takeaways

• Sony and Apollo in talks to jointly bid for Paramount Global.
• Potential deal would make Sony the majority owner of Paramount.
• Skydance Media has a tentative agreement to buy Paramount's controlling stake.
• Potential bidding war highlights consolidation in media/entertainment industry.
• Deal would mark a significant transformation for Sony's Hollywood presence.