An epic acquisition is on the horizon.
The investment community has learned that a super consortium composed of Sony and PE giant Apollo officially submitted a cash acquisition offer worth US$26 billion (about 180 billion yuan) to Paramount, becoming the world's largest cash acquisition this year.
The glory is gone, and the Hollywood giant, which has produced countless classic movies such as "The Godfather", "Titanic", "Forrest Gump", "Transformers", will change hands again. Prior to this, the consortiums of all parties were eyeing each other fiercely. And a secret episode is that in 2016, Wanda Group also negotiated a price and almost took Paramount into the bag.
Paramount
In the latest news, Paramount agreed to start formal negotiations with the Sony-Apollo consortium. Today, Paramount is controlled by Sally, the daughter of the late media mogul Sumner Redstone, who has long since decided to sell the company.
The largest acquisition of this year, 180 billion
Wanda also wanted to buy it
Behind every acquisition, there is always a wonderful game.
On May 1, a letter of offer from the Sony-Apollo consortium was put in front of Paramount: $26 billion (about 180 billion yuan), including the part that assumed debt. It's a price that's almost impossible to refuse. Based on the company's current market capitalization of about $9 billion, this bid can probably buy three Paramounts.
Apollo, one of the world's four largest PEs, has been coveting this acquisition for a long time. In mid-March of this year, it was reported that Apollo was in contact with Paramount to explore the possibility of a takeover, in which Apollo played more of an investor's role.
But according to the terms of the new offer, the real protagonist is Sony - who will hold a majority stake and become the controlling shareholder; Apollo, on the other hand, has a minority stake and relinquishes control of operations.
Now, the $26 billion offer came at the right time.
At this point, Paramount's negotiations with another bidder, Skydance Media, are in a see-saw phase. This is a media company led by the son of Oracle founder Larry Ellison, who released the news of the acquisition of Paramount half a year ago.
To do this, Skydance first found the current helmsman of Paramount, Shari Redstone. She inherited her father's shares in 2020, and Skydance went straight to the ground, offering to buy the shares of the Lei Shidong family, the controlling party, at a premium. The Lei Shidong family was moved, but the other shareholders of Paramount did not buy it, and urged Paramount to consider other offers.
莎莉·雷石东（Shari Redstone）
In the end, Paramount's parent company agreed an exclusive 30-day negotiation window with Skydance Media, with the deadline being on May 3 — two days after the Sony-Apollo consortium made its offer. In the latest news, Paramount Select Committee has launched trade negotiations with Sony and Apollo.
Under the game, the Paramount acquisition was pushed to the next climax, but this tug-of-war is far from over.
In fact, the interest in Paramount is more than that. In December 2023, another investment group, RedBird Capital and Skydance Media, were simultaneously revealed to be considering buying control of Paramount. According to the report, the consortium values the control of IP and Paramount Pictures.
Soon, another rival emerged — Warner Bros. Discovery CEO David Zaslav met with Paramount CEO Bob Bakish in New York to explore a possible merger; Subsequently, media tycoon Byron Allen also made a takeover offer.
Earlier, in 2016, China's Wanda Group also negotiated to buy a 49% stake in Paramount, which at the time was valued at $8 billion to $10 billion. But in the end, the deal fell through.
Fast forward to Paramount's record for the largest acquisition of 2024.
Coincidentally, at the just-concluded Buffett shareholder meeting, Buffett also mentioned Paramount, but he lamented that this was a failed investment for himself, "We have sold them all and lost a lot of money." And when Munger was still alive, he opposed the investment, bluntly saying that "the New York Broadway stage show is an investor's nightmare".
What used to be a Hollywood legend is now selling
Even those who are no longer familiar with Paramount must have seen at least one of the following movies -
"The Godfather", "Weekend Night Mania", "Raiders of the Lost Ark", "Forrest Gump", "Transformers", "Titanic", "Star Trek", "Mission Impossible", "Tomb Raider", "Truman's World", ...... These famous works are all produced by Paramount. And its story is far more exciting than the movie.
Paramount was founded a century ago by Adolf Zucker, who was born in Hungary and started his career as a vaudeville theater. At a time when movies were often crammed into small, old shacks that could only appeal to less educated immigrants, Mr. Zhucker was determined to bring them into the middle class.
So in 1912, he teamed up with the theater magnates Daniel Froman and Charles Froman brothers to create the famous players film company, under the slogan "Famous Plays by Famous Actors", which was the predecessor of Paramount.
It wasn't until 1916 that Paramount, which would later become famous in the film industry, was officially founded. Paramount expanded very rapidly in the early days, and in the early thirties of the last century, it had become Hollywood's leading film studio, but then it went through several ups and downs, and once fell into bankruptcy.
The turning point was in 1966, when the oil capital group bought Paramount, and in the following 20 years, Paramount produced classic movies such as "Love Story", "The Godfather" and "Raiders of the Lost Ark".
In 1993, entertainment giant Viacom and the departed former CEO battled it out to buy Paramount, and Viacom won the battle for a whopping $10 billion.
Immediately afterwards, Paramount welcomed the first woman in Hollywood history to lead the eight major film groups - Shirley Lansing, under her management, "Braveheart", "Forrest Gump", "Titanic", "Mission Impossible", "Changing Face", "Truman's World" and "Saving Private Ryan" and other classic movies have been released one after another, Paramount has entered another era of prosperity.
Since then, Paramount and DreamWorks have separated again less than three years after merging, and after years of infighting at the top of the parent company Viacom, the industry has already changed dramatically. Seeing the rise of rookies in the industry such as Disney and Netflix, this Hollywood giant with a history of more than 100 years can hardly hide its decline.
In 2019, the company merged with another media giant, CBS, and changed its name to Paramount Global. But since then, Paramount's stock price has fallen year after year, and it has rarely produced classic film and television works like "The Godfather". In the past 100 years, Paramount has no choice but to go lonely.
When the second generation decided to sell the company and leave the market with dignity
Today, Paramount is in the hands of Shari Redstone, a typical second-generation woman.
Her father was Sumner Redstone, a media mogul who shouted that "content is king." Once upon a time, there was only one other media bigwig who could be compared to Samler Leishidong: Murdoch.
In August 2020, at the age of 97, Samler died. Prior to this, there had been many infighting over the control of Paramount, with Samler's ex-wife, children, and friends all breaking up and even going to court. In the end, her daughter Sally survived years of infighting, and finally took this huge media empire into her own hands.
However, despite her efforts, she failed to revive Paramount and finally decided to sell the company.
We are not unfamiliar with such a scene. Since the average birth year of the founders of China's top 100 family businesses was in the late 1950s, most of them are now in their 60s to 70s. So the question arises: second-generation successor or selling?
As far as the eye can see, cases of second-generation succession continue to emerge; At the same time, there are more and more "selling companies".
I still remember that at the beginning of 2024, one of the largest mergers and acquisitions in A-shares was born - Mindray Medical spent 6.65 billion yuan to win the control of Huitai Medical in one fell swoop, which caused a sensation. There is another hidden truth behind this merger and acquisition case, Cheng Ling, the son of Cheng Zhenghui, the founder of Huitai Medical, did not hold a senior position as a director and supervisor in the company, and it is rumored that he has no intention of taking over his father's company.
In the end, as the founder, Cheng Zhenghui handed over his control, but retained his own interests to the greatest extent, which was a win-win situation.
The rise of mergers and acquisitions, and the reluctance of the second generation to take over is also one of the reasons. According to a set of statistics from Chenyi Investment, only 15% of unlisted family businesses are ready to be succeeded by their descendants; More than half of the listed family businesses have a change of control within five years of listing. Most family entrepreneurs decide to sell their business before they retire.
Under the giant curtain of the times, selling the company and leaving the scene with dignity is sometimes a good ending to the story; And handing over the company to a more suitable person may be the best continuation of them.
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