After more than a decade apart, CBS and Viacom agreed to merge on Tuesday in a deal that will reunite a roster of once-mighty media businesses. Viacom’s Paramount film studios and MTV and Nickelodeon cable networks will be added to the broadcast giant CBS and book publisher Simon & Schuster.
Viacom Chief Executive Robert M. Bakish will lead the combined company, which will be called ViacomCBS, and Joseph Ianniello, the CBS acting chief executive, will remain as head of a newly designated CBS unit, the boards of both businesses said in a statement.
The combination of CBS and Viacom is a victory for Shari Redstone, the leader of a family business that controls both. She had pushed for a deal for at least three years but faced fierce opposition from CBS’s board, including its former chief executive, Leslie Moonves. Mr. Moonves was pushed out last September after several women accused him of sexual assault. He has denied the charges. Ms. Redstone will be chairwoman of the combined company.
The merger is what is known as a stock swap, and values Viacom at about $11 billion as of Monday’s closing price. Under the swap, an investor with 1,000 shares of Viacom would receive 596.25 shares of CBS. CBS shareholders will in effect own about 60 percent of the combined business. The deal doesn’t include any cash, making it a tax-free transaction. Shares of both companies rose on Tuesday.
The two companies were once a single entity, called Viacom, until they were cleaved apart in 2006. Their reunification was seen as necessary at a time when audiences across television have eroded. Tech platforms like YouTube, Instagram and Netflix have chipped away at big media, eating into the once-fat profits that companies like CBS and Viacom enjoyed.
When they split in 2006, Viacom’s cable networks were seen as the faster growing business and CBS the aging, out-of-step broadcaster. Fortunes reversed in the last decade as CBS became the most watched television network and Viacom’s youth-centered channels were eviscerated by the internet.
The deal also represents the last in the current wave of massive media mergers. Two major transactions totaling more than $150 billion closed just last year. AT&T buttoned up its $80 billion acquisition of Time Warner. Shortly thereafter, The Walt Disney Corporation beat out rival Comcast to win the majority of Rupert Murdoch’s 21st Century Fox business for $71.3 billion.
This is a developing story and will be updated.