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The merger talks between Skydance and Paramount came to an abrupt end on Tuesday (June 11), as Paramount's controlling shareholder decided to cancel the deal. This brings an end to a long-standing drama that has been the talk of Hollywood for months.

Paramount-Skydance Deal

The suspended negotiations have disrupted efforts to bring together Paramount, the parent company of CBS, MTV, and Nickelodeon, with Skydance, the emerging movie studio responsible for "Top Gun: Maverick" and a crucial partner for Paramount's film business, AP reported.

The agreement fell apart right when it was about to be finalized. Prior to the scheduled vote by Paramount's special committee, the committee received an email from lawyers representing National Amusements, stating that the discussions were being terminated.

According to sources familiar with the matter, an email revealed that National Amusements and Skydance were able to reach an agreement on economic terms.

However, they were unable to come to a consensus on certain noneconomic terms.There were a few obstacles that arose last week as Skydance, Paramount, and its parent company, National Amusements, approached the final stages of negotiations.

Shari Redstone, the controlling shareholder of Paramount, expressed a desire for Skydance to offer legal protection for the deal, should investors pursue legal action.

Advisers diligently worked through the weekend to reach a compromise on the remaining terms. Despite the positive developments, the committee of Paramount's board members evaluating the plan decided to terminate their contract with a public relations firm.

Value Dispute Sinks Skydance-National Amusements Talks

The deal ultimately fell apart due to a breakdown in negotiations between Skydance and National Amusements.

According to two individuals familiar with the matter, Ms. Redstone was displeased by the revised terms from Skydance, which resulted in a decrease in the value of National Amusements from $2 billion to $1.7 billion, The New York Times reported.

This adjustment would have had an impact on her family's personal holdings. The negotiations were notably lengthy, indicating the high level of tension from both parties involved in the deal.

The discussions extended from late last year until this week, and were filled with leaks, which is typically not a positive indication of smooth negotiations.