Skydance Media and Paramount Global agreed to merge, the companies announced late on Sunday, scripting a new chapter for one of Hollywood’s oldest studios.
The companies agreed to a two-step process in which Skydance and its deal partners will acquire National Amusements, which holds the Redstone family’s controlling stake in Paramount, for $2.4 billion in cash.
Skydance will subsequently merge with Paramount, offering $4.5 billion in cash or stock to shareholders and providing an additional $1.5 billion for Paramount’s balance sheet.
Shares of the CBS broadcast network owner rose more than 4 percent in trading before the bell.
The deal represents the end of an era for Shari Redstone, whose father and late patriarch, Sumner Redstone, transformed the family’s chain of drive-in movie theatres into a media empire that included Paramount Pictures, the CBS broadcast network and cable television networks Comedy Central, Nickelodeon and MTV.
“Given the changes in the industry, we want to fortify Paramount for the future, while ensuring that content remains king,” Redstone, chair of Paramount and National Amusements, said in a statement, citing a phrase her father coined.
The merger would combine Paramount, home of such classic films as Chinatown, The Godfather and Breakfast at Tiffany’s, with its financial partner on several major recent films, including Top Gun: Maverick, Mission: Impossible-Dead Reckoning and Star Trek Into Darkness.
David Ellison, the 41-year-old tech scion who founded Skydance, will become chairman and chief executive of the new Paramount. Jeff Shell, former chief executive of NBCUniversal, will be its new president.