Latham & Watkins and Sullivan & Cromwell (S&C) are among a raft of firms that have been called in for Skydance Media’s merger with media conglomerate Paramount Global.  

Ropes & Gray, Cravath Swaine & Moore and Simpson Thacher & Bartlett are also acting on the deal, which brings together Paramount, home of classic films such as The Godfather and Breakfast at Tiffany’s, with its financial partner on several recent big releases including Star Trek Into Darkness and Top Gun: Maverick.

Under the terms of the deal, Skydance will merge with Paramount in a transaction valuing “New Paramount” at an enterprise value of approximately $28bn and Skydance at $4.75bn. The deal is intended to create a “next generation” technology-media hybrid company as Hollywood competes for attention with tech giants moving into the entertainment space. 

Latham is acting for Skydance and an investor group that includes Sullivan & Cromwell-repped private equity firm RedBird Capital Partners and the Ellison family.  

In a two-step process, the investor group will buy National Amusements, which holds the Redstone family’s controlling stake in Paramount and is being counselled by Ropes & Gray, for $2.4bn in cash.

Skydance will then merge with Paramount, offering $4.5bn in cash or stock to shareholders and a further $1.5bn for Paramount’s balance sheet, which currently holds billions in debt.  

Cravath is legal counsel to the Paramount special committee formed in January to evaluate options for the company, while Simpson Thacher is acting for Paramount Global.  

The deal follows more than six months of negotiations and will see Paramount chair Shari Redstone end her family’s links with the company after 30 years. Redstone’s late father, Sumner, bought Paramount Pictures in 1994 in a deal worth $10bn as part of the transformation of the family’s chain of drive-in movie theatres into a media empire that also included the CBS broadcast network and cable television networks Comedy Central and MTV.  

Skydance founder David Ellison, the 41-year-old son of Oracle co-founder Larry Ellison, will become chairman and chief executive of the new Paramount. Jeff Shell, chairman of RedBird Sports & Media and former chief executive of NBCUniversal, will be its new president.

The merger is subject to regulatory approval and expected to close in the third quarter of 2025. It also gives Paramount 45 days to solicit other offers, meaning there could be yet more installments in an already messy deal process that saw National Amusements pull the plug on advanced talks last month after the two sides failed to reach mutually agreeable terms.  

Paramount said the deal would combine the Skydance investor group’s financial resources, operating experience and tech expertise with its own “iconic IP, deep film and television library, proven hit-making capabilities, and linear and streaming platforms”.  

Paramount has struggled in recent years. The company has lost almost $17bn in value since late 2019, according to Reuters, as its traditional television business has shrunk more rapidly than its Paramount+ streaming service could turn a profit.

Ellison promised to bring “best-in-class technology and modernised infrastructure” to Paramount+ and Pluto TV, the free streaming service, as well as enhance Paramount’s traditional television networks.    

The Latham team acting for Skydance and the investor group was led by partners Justin Hamill, Bradley Faris, Ian Nussbaum, Max Schleusener, Rick Offsay and Liliana Paparelli Ranger. Advice was provided on tax matters by partners Pardis Zomorodi, Katharine Moir and Julie Crisp.    

The S&C corporate team advising RedBird Capital includes Alison Ressler, Eric Krautheimer, Ari Blaut, Isaac Wheeler, Juan Rodriguez, Mitchell Friedman and Renata Hesse.  

The Ropes & Gray team counselling National Amusements included M&A partners Jackie Cohen and Emily Oldshue; litigation and enforcement partners Peter Welsh and Marty Crisp; tax partner Scott Pinarchick; benefits partner Renata Ferrari; finance partner Byung Choi; antitrust partners Michael McFalls and Ruchit Patel; and intellectual property partner Erica Han.

The Cravath team guiding Paramount’s special committee was led by M&A partners Faiza Saeed, Daniel Cerqueira and Claudia Ricciardi, while the Simpson Thacher team guiding Paramount Global was led by M&A partners Eric Swedenburg and Katherine Krause. Also working on the team were partners Jamin Koslowe (ECEB); Jonathan Goldstein (tax); Brian Steinhardt (banking and credit); Hui Lin (capital markets); Jonathan Lindabury (derivatives); Lori Lesser (IP); and Sara Razi (antitrust).

RedBird Advisors, BofA Securities, Moelis & Company and The Raine Group are serving as financial advisers to Skydance and the investor group on the matter. BDT & MSD Partners serves as financial adviser to National Amusements, while Centerview Partners is financial adviser to the Paramount special committee and Rothschild & Co is financial adviser to Paramount Global.