Billionaire Larry Ellison will own a controlling interest in Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA) once the merger with Skydance Media finalizes in 2025.
What Happened: Ellison, one of the world's richest people, will be the majority shareholder of National Amusements, the company that has controlling ownership of Paramount Global.
As reported by Variety, Ellison will own 77.5% of National Amusements, the company that controls Paramount. The ownership comes with Ellison helping to finance a merger between Paramount and Skydance Media, a company led by his son David Ellison.
RedBird Capital Partners founder Gerry Cardinale will own the remaining 22.5% of National Amusements, according to the report. Larry Ellison and RedBird have agreed to loan up to $277 million to National Amusements prior to the closing of the merger according to a filing.
The elder Ellison is helping his son get control of Paramount to merge Skydance with Paramount. David Ellison founded Skydance Media in 2006. The 41-year-old will be the CEO of the new combined company.
Skydance Media has an existing deal to co-produce and co-finance films with Paramount.
Larry Ellison co-founded Oracle Corporation (NYSE:ORCL) and currently serves as the chairman and chief technology officer. His stake in the company helped him become one of the richest people in the world.
He also owns a stake in Tesla, a company where he previously served on the board of directors.
The elder Ellison is currently worth $157 billion, rankings sixth in the world by Bloomberg.
Ellison will now have control of the new media company run by his son, which could make for some interesting family conversations in the future.
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Why It's Important: The merger will see Skydance buy Shari Redstone's National Amusement to gain control of Paramount Global. The combined entity will form a new media company.
An injection of cash and an improved balance sheet is expected to "deliver significant public interest benefits" for the new Paramoun, according to the filing.
The deal from Skydance was announced in July and came after months of reports of a potential merger. A last-minute rival bid from Edgar Bronfman Jr. during Paramount's go-shop period put the potential Skydance merger in doubt.
Bronfman eventually exited the negotiation process.
PARA Price Action: Paramount shares are down 2% to $10.22 on Friday versus a 52-week trading range of $9.54 to $17.50. Paramount stock is down 29% year-to-date in 2024.
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