April 5 (Reuters) - A deal between Paramount Global ( PARAA )

and Skydance Media could see the media conglomerate

acquire the independent studio

in an all-stock transaction valued at around $5 billion, the

Wall Street Journal reported on Friday.

Under the terms being discussed, National Amusements, which

controls Paramount, would receive over $2 billion in cash in the

first step of the transaction, according to the report.

Separately, Skydance could provide a substantial cash

infusion to Paramount, owner of the Paramount Pictures film

studio, to bolster its balance sheet and help pay down debt, the

Journal said, citing people familiar with the matter.

Paramount and Skydance did not respond to Reuters' request

for comment on the WSJ report outside business hours. National

Amusements and its controlling shareholder Shari Redstone could

not be contacted immediately.

Members of Paramount's board agreed to enter into exclusive

merger talks with Skydance Media, favoring the independent

studio over a $26 billion offer from private equity firm Apollo

Global Management ( APO ), Reuters reported on Wednesday.

By merging the two companies, the combined entity would have

much more flexibility around what it could do with those

franchises, the WSJ said, adding that Redstone would get cash

while investors with nonvoting shares would get stock in the

combined company.

The deal talks are more advanced than the offer from Apollo,

and if successful, would end Shari Redstone's control of the

media empire built by her father, the late Sumner Redstone. The

agreement grants Skydance 30 days of exclusive talks with

Paramount.

Skydance is led by David Ellison, son of Oracle

co-founder Larry Ellison, and is seeking to buy National

Amusements which directly or indirectly owns about 77% of

Paramount's voting class stock.

That sale is contingent upon Ellison's ability to merge

Skydance and Paramount Global ( PARAA ).

(Reporting by Shubhendu Deshmukh in Bengaluru; Editing by

Sandra Maler and Muralikumar Anantharaman)