Sony Pictures Entertainment and private equity giant Apollo Global Management have formally expressed interest in acquiring Paramount for roughly $26 billion, according to two people familiar with the matter, a move that adds drama to an already chaotic deal-making process.

The nonbinding expression of interest, sent in a letter this week, comes as Paramount approaches an agreed-upon Friday deadline for the expiration of an exclusive negotiating period with Skydance, a Hollywood studio run by tech scion David Ellison. Paramount has been in talks with Skydance for months, discussing a complicated transaction that would involve a merger and an investment from private equity firm Redbird Capital Partners.

The new, joint expression of interest would make Sony a significant majority and controlling shareholder and Apollo a minority shareholder. The proposed all-cash acquisition may appeal to Paramount shareholders who have come out against the Skydance deal over concerns it benefits the company’s controlling shareholder, Shari Redstone, at the expense of others.

Paramount declined to comment.

The proposed merger of Sony and Paramount would create a new powerhouse in Hollywood, uniting the studios behind the “Spider Man” and “Mission: Impossible” franchises. Sony executives have discussed operating the Paramount studio as a division of their broader empire, combining their marketing and distribution functions.

Sony, a sprawling international conglomerate known for its cutting-edge electronics business, is an unconventional suitor for Paramount. Like Comcast, which owns NBCUniversal, Sony has a highly profitable business outside traditional media, generating hundreds of millions of dollars from video games, music, imaging and sensors. That insulates Sony from the travails of the media industry, which has lately been challenged by the decline of the traditional theatrical business and the death of cable television.

The letter, which was signed by Tony Vinciquerra, chief executive of Sony Pictures Entertainment, and Aaron Sobel, a partner at Apollo, is intended to be a starting point for negotiations to acquire the company, according to a person familiar with the matter. The two sides have not begun doing due diligence, a process that could affect the amount Sony and Apollo are willing to pay.

One looming question for both Apollo and Sony is the eventual fate of Paramount’s CBS broadcast network. Regulations restrict foreign ownership of broadcast networks, throwing up a potential roadblock for Sony Pictures, a division of the Tokyo-based Sony Group Corp.

But the companies believe they can overcome those concerns, according to two people familiar with their plans. Apollo, a U.S.-based firm, already owns TV station group Cox Media Group, a deal that required approval from the Federal Communications Commission, which regulates U.S. broadcasters. The FCC, however, blocked a separate deal that involved Apollo, when investment firm Standard General tried to buy Tegna, a TV station group, with financing from Apollo.

One possible remedy under consideration is to have Apollo, which has already gone through government approval, hold the license for the CBS broadcast network, the people said.

It remains to be seen whether a bid from Sony and Apollo would be acceptable to Redstone, whose controlling stake would allow her to veto any deal. Redstone has already signed off on a potential deal to sell her controlling stake to Skydance, but that deal is contingent on a separate deal for Paramount.

The expression of interest from Apollo and Sony heaps additional scrutiny on the special committee of Paramount’s board of directors that is evaluating the company’s options. An all-cash alternative to Skydance’s offer — for which many shareholders have expressed support — would put more pressure on negotiations between Ellison and Paramount.

The deal talks come at a chaotic time for Paramount. Bob Bakish, the company’s former chief executive, stepped down this week amid tensions with Redstone. Bakish, who had expressed reservations about the deal with Skydance, was an architect of the company’s current strategy, which involves signing up subscribers to the Paramount+ streaming service.

In his place, Paramount’s board has installed a trio of executives who run an “office of the CEO” within the company. Collectively, the executives — CBS CEO George Cheeks; Showtime and MTV Entertainment Studios CEO Chris McCarthy; and Paramount CEO Brian Robbins — have decades of experience at the company but are untested in their current three-way leadership role.

This article originally appeared in The New York Times.

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