CBS And Viacom Merge

CBS And Viacom Merge

Management expects to generate $500 million a year in corporate cost savings within a year or two of the deal closing.

That isn't stopping Viacom CEO Bob Bakish, who will lead the combined company, to declare that ViacomCBS will be "one of only a few companies with the breadth and depth of content and reach to shape the future of our industry".

This would mean that for the first time since the two companies split in 2005, the Star Trek franchise - TV and movie rights alike - would be housed under one roof.

The all-stock deal, announced Tuesday, combines the most-watched USA broadcast network with the parent of Paramount Pictures and cable channels such as MTV and Nickelodeon. "Frankly, they may not be big enough still to compete with Disney and Netflix", he said, noting that "Netflix spends something like $15 billion on new product". Shari Redstone, his daughter, is vice chairman on both company's boards, and pushed for the merger for years.

CBS buying Viacom in an all-stock transaction that values Viacom at its current stock market capitalization of around $12 billion, the companies announced Tuesday. Bringing the two companies back together has always been a goal of Shari Redstone, who controls the company with Sumner, the aging family patriarch who has faced numerous health issues.

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Shari Redstone, the vice chair of both companies who had been pushing for the reunion, noted that she thought the combined unit "can realize the incredible power of their combined assets" and promised "a world-class, multiplatform media organization". Viacom shares will be converted into shares of CBS, with CBS shareholders owning about 61% of the combined company, and Viacom the rest.

Discovery, whose Chief Executive David Zaslav was briefly mentioned as a potential candidate to run CBS, is also busy building a non-scripted entertainment, natural history and "factual programming" empire. These include CBS All Access and Showtime, which deliver premium, branded content live and on demand to millions of subscribers; Pluto TV, the leading free streaming TV service in the USA; and niche products such as CBSN, ET Live and Noggin. Viacom and CBS are largely not direct competitors, and the U.S. Justice Department recently lost its challenge to the AT&T takeover of Time Warner. CBS under longtime chief Les Moonves became more profitable and Viacom struggled, hurt by weakness in its Paramount studio and people dropping cable in favor of streaming. More heavily traded Class B shares of Viacom were trading up 0.7% to $28.73, but off of highs earlier in the day.

This time around, the negotiations dragged on several days as the two sides worked out the details.

The troubled merger has been in talks for more than three years, with former CBS CEO Leslie Moonves taking the lead on opposing the reunification.

"We would want to look at something after that to. develop more scale as we move forward", Redstone said at The Information's Women in Tech, Media and Finance conference in June. Disney's stock was up 1%, while Netflix was unchanged.