CBS to merge with Viacom in $11.7 billion deal

Shari Redstone

The Redstone family media empire has been reunited after more than a decade apart.

Under an agreement, Shari Redstone agreed not to push for a reunion for at least two years, but that left open the possibility of CBS itself pushing for it.

Joe Ianniello, the president and acting chief executive officer of CBS Corp., will become chairman and CEO of CBS, overseeing all CBS-branded assets in his new role, the companies said.

The all-stock merger still needs regulatory approval, but that shouldn't be a problem at a time when the gravitational pull of media consolidation is creating larger and larger overseers of entertainment content.

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.

Taken together CBS and Viacom's market capitalisation of about $30 billion (£24.9 billion) is dwarfed by Disney's $247 billion and Netflix's $137 billion. Instead, you're greeted with a generic landing page and a scary browser message saying "Not Safe".

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Both CBS Corp. and Viacom have always been controlled by Sumner Redstone, 96, and more recently his daughter, Shari, 65, through their family's privately owned company, National Amusements, which operates movie theaters in the US, United Kingdom and Latin America. MoffettNathanson analyst Michael Nathanson said Paramount's movie library could be added to Showtime's premium networks and streaming service, for instance, while CBS' streaming service could get a boost from Viacom's Nickelodeon video.

Walt Disney Co.in March bought most of 21st Century Fox in a deal valued at $52 billion, while AT&T in June completed its acquisition of Time Warner for $85 billion. Notably, in addition to content licensing, CBS and Viacom are developing must-watch programming for a broad range of third-party networks and platforms to feed significant demand for original, premium content. The new company wants to speed up the growth of its streaming services, including CBS All Access, Showtime, and Pluto TV, the free ad-supported service that Viacom owns, and drive more advertising to its services.

"I am really excited to see these two great companies come together so that they can realise the incredible power of their combined assets", said Shari Redstone, who will chair the new company, ViacomCBS. "My father once said 'content is king, ' and never has that been more true than today". The $6-a-month service now has a new "Star Trek" series, a revival of "The Twilight Zone" and archives of old and current broadcast shows. 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.

According to Bloomberg, CBS had been mulling over its next steps following the ousting of former CEO Leslie Moonves over sexual misconduct allegations.

Under the deal's terms, Viacom shareholders would receive about a 0.6 share of CBS stock in exchange for 1 share of Viacom stock.

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