In a significant move within the media industry, Sony Group Corp. and Apollo Global Management Inc. have together proposed a $26 billion cash bid to take Paramount Global private. The ambitious offer includes an all-cash transaction for Paramount shares and the absorption of existing debt, positioning the bid as a direct competitor to a prospective merger between Paramount and Skydance Media. Skydance, under David Ellison and backed by investors including RedBird Capital Partners and KKR, had been the favored choice under Paramount’s control by Shari Redstone. Despite this, the entry of the Sony-Apollo bid has started to tip the scales, as evidenced by over a 14% increase in Paramount’s nonvoting stock price. Bloomberg has highlighted a nonbinding interest expression from Sony and Apollo, suggesting the buyers’ strong intent. Nonetheless, the proposed merger would not only possibly trigger mass layoffs but would also decrease the count of major Hollywood studios, as noted with Disney’s prior acquisition of 20th Century. While the Skydance deal suggests an expansion of Ellison’s stake, the Sony-Apollo alliance presents an alternative path, with Sony poised to be the majority owner in the newly combined entity. The complexity of this deal is further heightened by potential regulatory challenges due to foreign ownership rules governed by the FCC. Apollo’s prior attempts at engaging with Paramount have been dismissed, but with an escalated bid on the table, discussions are set to possibly prolong past the exclusive negotiating window with Skydance.

Media & Entertainment, Private Equity, Consumer Electronics,United States, Japan