CBS Corporation and Viacom Inc. have merged for the second and, hopefully, the final time to form ViacomCBS Inc. after years of on-and-off negotiations. The merger is expected to be completed either later this year or by early 2020.
The combined company will have the largest market share -- 22% -- of the U.S. television viewing audience. It will also boast of a combined $28 billion in revenue.
CBS is buying Viacom in an all-stock deal that values Viacom at its current stock market capitalization of $12 billion. The market value of CBS stands at some $18 billion, the companies announced Tuesday.
The merger reunites two media companies controlled by National Amusements Inc., a theater chain owned by billionaire Sumner Redstone. Through National Amusements, Redstone and his family are the majority voting shareholders of CBS and Viacom.
Redstone is the majority owner and chairman of the board of the National Amusements.
Viacom and CBS first merged in 1999 in a deal valued at $35.6 billion at the time. The deal later soured and both firms wound up parting ways in 2005.
CBS owns the CBS Television Network, CBS News and 15 CBS-TV stations. It also owns the cable network Showtime and publisher Simon & Schuster. On the other hand, Viacom controls the movie studio Paramount and several major cable networks such as Comedy Central, MTV, Nickelodeon, and BET. It also owns streaming services Pluto TV and South Park Studios.
"I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets," said Redstone
"My father once said 'content is king,' and never has that been truer than today."
The U.S. media industry is now dominated by entertainment and telecommunication industry giants merging to form ever-larger conglomerates.
ViacomCBS now faces the daunting tasks of competing against Netflix, Amazon and other legacy media companies on spending massively for its products. ViacomCBS has spent more than $13 billion over the past 12 months. It now plans to "accelerate" their streaming strategies and expand globally, according to a statement by both firms.
Viacom CEO Bob Bakish will be CEO of ViacomCBS. CBS CEO Joe Ianniello will be chairman of CBS and in charge of CBS assets after the merger. CBS CFO Christina Spade was named CFO of the combined company.
Existing CBS shareholders will own about 61% of the combined company. Viacom shareholders will own the remaining 39%. Each Viacom shareholder will receive .59625 shares of CBS shares.
