Paramount merger with Skydance gets approval from SEC
Paramount merger with Skydance gets approval from SEC
The update is a win for Paramount, but larger concerns still loom for the transaction.
Although the Paramount Global merger with Skydance Media may still be in turmoil, it has taken an important step forward. The transaction now has approval from the Securities and Exchange Commission and the European Commission, clearing two key regulatory hurdles. However, other roadblocks remain that could ultimately derail the merger.
Key Details:
- Getting approval from the SEC can be a long and complicated process.
- The deal could face resistance from the Trump administration over political considerations.
- The merger also faces three separate lawsuits in Delaware court.
The process of seeking approval from the SEC can be incredibly complex and involves addressing a laundry list of questions. However, that process is now complete and the Commission has officially made effective the registration statement outlining the merger terms.
The merger’s status with the Federal Communications Commission (FCC) is still a bit more up in the air. President Donald Trump has an ongoing lawsuit against CBS News over a “60 Minutes” interview with former Vice President Kamala Harris which the president alleges was edited unfairly. Those political considerations could cause Trump to lean on FCC commissioner Brendan Carr to hold up the deal.
However, Skydance CEO David Ellison’s father, billionaire Larry Ellison, is a significant Trump supporter, which could sway the president. Paramount executives have been discussing a settlement with Trump, and other media companies have recently announced similar agreements. Meanwhile, Democratic lawmakers have sent a letter to Carr, angered by the decision to “punish, censor or intimidate” news outlets over “political disagreement over editorial choices.”
The merger also faces three separate lawsuits in Delaware Chancery Court. Paramount has been ordered to turn over a set of transaction-related documents to the Employees’ Retirement System of Rhode Island, which owns Paramount stock and is concerned that the Skydance deal enriches the company’s controlling shareholder Shari Redstone at the expense of other investors.
This week, a new lawsuit filed by five New York City employee pension funds on similar grounds is seeking to halt the merger in its tracks. Gabelli Funds, which is the largest owner of Class A shares of Paramount outside of Redstone herself, is also suing for more information on the transaction.
So, while Paramount and Skydance have moved past a significant hurdle toward finishing their merger, bigger ones are still blocking the path. The companies had hoped to consummate their transaction in the first half of this year, but it very much remains to be seen whether or not they will meet that goal.
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