Sony abandons acquisition of Paramount: strategic incompatibility, risk is too high

This website reported on August 8 that Sony Group President, Chief Operating Officer, and Chief Financial Officer Hiroki Totoki said on Wednesday that the company will not reconsider the acquisition of film and television production giant Paramount Global. This marks the official end of Sony's acquisition plan for Paramount.

It was previously reported that Sony and private equity giant Apollo Global Management had been interested in acquiring Paramount for about $26 billion, but it was later reported that Sony was reconsidering the plan.
Toki Hiroki said at Sony's first fiscal quarter earnings conference that acquiring the entire Paramount "doesn't fit well with our strategy" and said it may bring considerable risks because it may not be suitable for the company. capital allocation structure.
Toki Hiroki's comments confirm a Nikkei report on Tuesday that Sony has decided not to make a new offer for Paramount Universal after independent film studio Skydance Media struck a deal to acquire media giant Paramount.
According to our understanding, Paramount is one of the oldest production companies in Hollywood and owns well-known IPs such as "SpongeBob SquarePants" and "The Godfather". Last month, Paramount Universal announced it would merge with Skydance Media. The merger between the two parties took place in two steps. Skydance first acquired National Amusements for US$2.4 billion, which holds the Redstone family's controlling stake in Paramount. Skydance then merged with Paramount, providing $4.5 billion in cash or stock to its shareholders and an additional $1.5 billion to Paramount's balance sheet, valuing the combined company at approximately $28 billion.
Once the deal closes, Skydance’s investor group will own 100% of New Paramount’s Class A voting shares and 69% of the outstanding B shares. At the same time, Skydance will take control of Paramount and become the owner of Paramount Film and Television Studios, Paramount+, CBS, and cable channels such as Nickelodeon, MTV and Comedy Central.
This marks the official end of the Redstone family’s decades-long control of Paramount. The Redstone family has been Paramount's controlling shareholder since media mogul Summer Redstone first acquired the company in 1994. After Summer's death in 2020, his daughter Sherry Redstone took over the company.

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