The Strategist

CBS, Viacom announce merger

08/14/2019 - 10:50

US media companies CBS Corp and Viacom Inc have agreed to merge in the form of exchange of stocks. The deal will create a company with annual revenues of more than $ 28 billion.

"The combined company - ViacomCBS Inc. - will become the leading global multi-platform company producing premium content, with assets, capabilities and scale that will enable it to become one of the most important content producers and suppliers in the world," the CBS-Viacom joint press release reads.

The deal will result in a reunion of assets of media mogul Sumner Redstone, who split CBS and Viacom in 2006. As a result, such well-known media assets as MTV and Nickelodeon cable channels owned by Viacom, as well as Paramount studio and CBS broadcast network, will be merged in one company.

Companies expect ViacomCBS to compete with US entertainment giants such as Walt Disney Co., Comcast Corp., AT&T Inc. and Netflix Inc.

Under the terms of the transaction, Viacom shareholders will receive 0.59625 shares of CBS for each paper of the company. Thus, Viacom is valued at approximately $ 11.8 billion, which generally corresponds to its current capitalization.

CBS shareholders will own about 61% of the new company, Viacom shareholders will receive about 39%. The boards of directors of both companies approved the deal.

Redstone's daughter, Shari Redstone, who is the vice chairman of the boards of directors of both CBS and Viacom, will head the board of directors of the combined company. ViacomCBS's CEO will be Bob Bakish, the current Viacom CEO.

CBS will receive six of 13 seats on the board of directors of the combined company, Viacom - four. Bob Bakish will also be on the board, and National Amusements will take two more seats.

The deal requires regulatory approval and is expected to be closed by the end of 2019.