Lionsgate carves out $4.6 bn studio business in new merger deal

Lionsgate is set to transform its studio business through a strategic merger with Screaming Eagle Acquisition Corporation, a special purpose acquisition company (Spac) helmed by Hollywood executives Harry Sloan and Jeff Sagansky. The significant deal, valuing the studio division at $4.6 billion, represents a milestone in the entertainment industry.
Streaming platform Starz will continue to be under the Lionsgate ownership.
The new firm, Lionsgate Studios, will consolidate the motion picture and TV studio divisions of Lionsgate, known for franchises like John Wick and the Oscar-winning film La La Land. Lionsgate Studios will also encompass the company's talent management, production, and distribution businesses.
As part of this deal, Lionsgate Studio will get a total of $350 million, with half of the amount sourced from the cash held in the Screaming Eagle Acquisition Corporation trust and the remaining portion from a private investment in public equity.
"This transaction creates one of the world’s largest publicly traded pure-play content platforms," said Lionsgate Chief Executive Jon Feltheimer and Vice-Chair Michael Burns in a joint statement released on Friday.
Lionsgate, known for iconic franchises such as the Hunger Games and Twilight, will retain an 87.3% stake in the newly formed Lionsgate Studios, with Screaming Eagle owning the remaining shares.
The decision to spin out Lionsgate Studios comes two years after Harry Sloan, former chair of Hollywood studio MGM and current Screaming Eagle board member, joined Lionsgate’s board of directors.