Sony Pictures and Apollo Global Bid $26 Billion for Paramount Global

Sony Pictures Entertainment and Apollo Global Management have submitted a $26 billion all-cash offer to acquire Paramount Global. The bid comes as Paramount's board considers a merger deal with Skydance Media, with a decision expected soon.

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Sony Pictures and Apollo Global Bid $26 Billion for Paramount Global

Sony Pictures and Apollo Global Bid $26 Billion for Paramount Global

Sony Pictures Entertainment and Apollo Global Management have joined forces to submit a staggering $26 billion all-cash offer for the acquisition of Paramount Global. The nonbinding bid, which includes the assumption of debt, comes as Paramount's board is already considering a merger deal with Skydance Media. If successful, this move would not only reshape the media industry but also potentially reduce the number of major Hollywood studios from five to four.

Why this matters: The potential acquisition of Paramount Global could have significant implications for the future of the entertainment industry, potentially leading to a consolidation of power and a shift in the balance of creative control. Additionally, the deal could also raise concerns about the impact on jobs and the diversity of content offerings in the industry.

Under the terms of the proposed deal, Sony would emerge majority owner of the combined company, with Apollo taking on a minority stake. The offer, which values Paramount Global at a premium over its current $22 billion enterprise value, would involve Sony Corp. merging Sony Pictures Entertainment into a joint venture with Paramount Global, with both companies contributing cash to finance the deal.

The bid arrives just as Paramount Global's board nears the end of a 30-day exclusive negotiating window with Skydance Media, led by CEO David Ellison. Skydance's proposal, backed by investment firms RedBird Capital Partners and KKR, would merge Paramount and Skydance while keeping Paramount Global public. Shari Redstone, the controlling shareholder of Paramount Global, is known to prefer the Skydance deal, which would involve her selling her stake in National Amusements to Skydance for up to $2 billion.

The Sony-Apollo bid comes on the heels of significant leadership changes at Paramount Global. On Monday, CEO Bob Bakish, who had opposed the Skydance proposal, was ousted from his position. The company will now be jointly run by a triumvirate of top executives: Paramount Pictures CEO Brian Robbins, CBS CEO George Cheeks, and Showtime/MTV Entertainment Studios chief Chris McCarthy.

The potential acquisition, however, could face regulatory obstacles. Federal Communications Commission rules restrict foreign ownership of broadcast TV stations, which means Paramount's CBS station group would likely have to be sold or licensed to Apollo. Additionally, Paramount is currently in negotiations with Charter Communications to work out a new deal for carriage of the company's TV channels, which could factor into Paramount's valuation in the event of a sale.

Key Takeaways

  • Sony Pictures and Apollo Global Management offer $26 billion to acquire Paramount Global.
  • The deal would make Sony the majority owner, with Apollo taking a minority stake.
  • Paramount's board is considering a rival bid from Skydance Media, led by CEO David Ellison.
  • The acquisition could lead to a consolidation of power and impact jobs and content diversity.
  • The deal faces regulatory obstacles, including FCC rules on foreign ownership of broadcast TV stations.