A few weeks ago, private equity firm Apollo Global Management launched the hostilities, proposing to acquire Paramount's film and TV studios (Paramount Pictures) for $11 billion. Well in excess of Paramount Global's total capitalization, the proposal sent Paramount's share price soaring.

At the same time, Skydance Media, another film production giant, initiated merger talks with the entire Paramount Global group. Byron Allen, the industry businessman who heads Entertainment Studios, also recently expressed an interest in a takeover. And a few months ago, there were rumours of a possible tie-up between Paramount and the giant Warner Bros Discovery, and signs of interest from Netflix.

Irritated by this competition, Apollo considerably beefed up its offer, raising it to $27 billion for all Paramount's assets. The target's capitalization now exceeds $9 billion, to which must be added $14.6 billion in debt.

Between doubts about Apollo's financing capabilities and long-standing synergies with Skydance, Paramount tipped the balance in favor of the latter and gave an initial agreement in principle. The announcement, even better received by the markets, triggered a further jump in the share price.

The merger would involve the sale of National Amusements, the Redstone family holding company which holds around 77% of Paramount's voting rights, and with which Skydance's CEO has been in talks for several months. It is also conditional on the possibility of merging the two entities' production studios.

Paramount has shed over 85% of its stock market value since its 2021 highs. At that time, Viacom CBS suffered a massive share sell-off, surrendering 11 billion in market value in a single session, and thus wiping out the gains due to the launch of the Paramount+ streaming service a few days earlier.