Paramount Global is set to merge with Skydance Media, the production company ran by David Ellison, following months of speculations as to whether Shari Redstone would agree to give up her company's controlling stake of Paramount parent company, National Amusements (NAI).

The merger will take place over a two step-step transaction, with a consortium led by Skydance Media and RedBird Capital to acquire Redstone's 77% stake of NAI, and subsequently merge with Paramount Global. The deal follows more than six months of negotiations, with the deal previously knocked back NAI last month.

Now, with the unanimous approval of the Paramount Global board - and assuming its completion and approval by US regulators - Skydance will take full control of Paramount's studios (and associated IP), the broadcast network, streaming service and cable channels. It is not yet understood how the merger will impact the Paramount business locally.

'New Paramount' as the soon-to-be-merged business is being referred to, will be led by Ellison as chairman and CEO, with Jeff Shell to be appointed as president, and Skydance has outlined plans to "enhance and reinvigorate marquee Paramount and CBS brands".

Shari Redstone, Chair of Paramount Global and Chair, President, and CEO of National Amusements, Inc. said: “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global. He had a vision that "content was king" and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”

Founder and Chief Executive Officer of Skydance, David Ellison, said: “This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy. I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

Founder and Managing Partner of RedBird Capital, Gerry Cardinale, said: “The recapitalization of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation. As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution – but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.”

At the request of NAI, Paramount Global created a Special Committee in January to evaluate the potential transactions involving NAI and Paramount.

On behalf of the Special Committee, Charles E. Phillips, said: "We are pleased to have reached an agreement that we believe delivers to Paramount stockholders both immediate value and future upside opportunity. The Special Committee, with the assistance of independent financial and legal advisors, conducted a thorough review of actionable potential transactions to drive value for our stockholders. In addition to economic value, the Special Committee took into account the certainty of closing and regulatory approvals. Following extensive negotiations with Skydance, we believe this proposed transaction will position Paramount for success in a rapidly evolving industry landscape. Upon closing, it will deliver immediate cash consideration at a premium to both the minority Class A and Class B stockholders, who will also benefit from what we believe to be considerable upside through continued equity participation in New Paramount."