The recombination comes amid an increasingly competitive media landscape dominated by Disney and Netflix, prompting Redstone to pursue a merger.
"Today marks an important day for CBS and Viacom, as we unite our complementary assets and capabilities and become one of only a few companies with the breadth and depth of content and reach to shape the future of our industry", said Bob Bakish, president and CEO of Viacom, who will hold both titles in the combined company.
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 deal would combine such well-known entertainment brands as CBS and Showtime with Viacom's Paramount television and movie studios, Nickelodeon, Comedy Central and MTV.
The companies said in a press release that they agreed to an all-stock merger that would combine the largest US television business with a major Hollywood studio in Paramount Pictures and other businesses that "accelerate CBS and Viacom's ability to deliver an array of compelling content to important and diverse audiences across both traditional and emerging platforms around the world".
To give you an idea as to the size of the new company, the press release makes a point of noting that Viacom and CBS over the past 12 months spent $13 billion on content. Instead, you're greeted with a generic landing page and a scary browser message saying "Not Safe". Shari Redstone, daughter of media mogul Sumner Redstone, runs the holding company. For advertisers and agencies, the combined company will provide industry-leading reach through a variety of formats, including a portfolio of differentiated advanced advertising and marketing solutions, such as CBS Interactive, Viacom Vantage and Viacom Velocity, which will be applied against significant, expanded inventory across the portfolio. Joe Ianniello, formerly chief operating officer, has been running the company as interim CEO ever since.
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. Six will come from independent members from CBS, four independent members from Viacom, Bakish, and two National Amusements members.
Viacom, CBS, Redstone's National Amusements, Sony and Discovery declined to comment. "My father once said "content is king" and never has that been more true than today". Streaming is the new TV and only those players with enough scale, great content, and the right platform will prevail. 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.
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.