Sony and Apollo Bid $26 Billion for Paramount Acquisition

Sony Group, in collaboration with U.S. investment fund Apollo Global Management, has tabled a $26 billion acquisition offer for Paramount Global, according to reports from the Financial Times.

The proposed acquisition, though non-binding at this stage, marks a significant move for Sony Pictures Entertainment (SPE) and Apollo, as they aim to cement their presence in the ever-evolving landscape of the entertainment industry.

The letter outlining the buyout offer was reportedly dispatched to Paramount on Wednesday by Sony Pictures Entertainment and Apollo, as disclosed by sources familiar with the matter. However, both Sony Group and SPE declined to comment on the speculation.

Should the deal materialize, it would rank among the largest overseas acquisitions by a Japanese firm to date, standing shoulder to shoulder with SoftBank Group’s landmark acquisition of U.K. chipmaker Arm in 2016, valued at over $32 billion. Paramount’s extensive library of intellectual property, which includes iconic titles such as “The Godfather” and “Forrest Gump,” presents an enticing opportunity for SPE to bolster its movie repertoire.

Related: Paramount CEO Bob Bakish Steps Down as Merger Inches Closer

The move comes amidst a strategic shift within the entertainment industry towards a streaming-centric business model. In the United States, Sony has notably refrained from operating its streaming or broadcast services, apart from the anime streaming platform Crunchyroll, instead opting to license its intellectual property to streaming giants like Netflix. Consequently, acquiring additional hit IP through Paramount could prove instrumental in Sony’s efforts to remain competitive in the evolving landscape.

For Sony Group, led by CEO Kenichiro Yoshida since 2018, the proposed acquisition aligns with its broader strategy of transitioning from a focus on electronics to entertainment, encompassing music and movies.

Over the past six years, the conglomerate has channeled substantial investments, totaling 1.5 trillion yen ($9.8 billion), into entertainment-related ventures, including music publishing and gaming. Strengthening Sony Pictures Entertainment emerges as a pivotal component of the company’s overarching vision, as underscored by Yoshida’s remarks to Nikkei earlier this year, emphasizing the allure of studios with significant intellectual property.

However, Sony faces formidable competition in its pursuit of Paramount, with major U.S. film production company Skydance Media emerging as a rival bidder in the race for the renowned Hollywood studio.

Source: Financial Times