BROADCASTING giants CBS and Viacom are set to merge in a media deal that will see shared ownership of MTV, Comedy Central and Paramount Pictures.
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The united company to come from the merger, with $28bn in revenue, will be called ViacomCBS.
The stocks of both companies rose two percent after the announcement, but dropped back soon afterwards. Some analysts have criticised the move, saying Viacom will have to prop-up an ailing CBS. Others have questioned the legality of the merger.
The two companies had previously been part of the same corporation, but split in 2006. Sumner Redstone, the owner of ViacomCBS, was responsible for that break-up. Viacom had then been on a popularity boom with viewers, while CBS ratings were lagging.
Redstone’s daughter, Shari Redstone, will chair the new company, and Viacom CEO Bob Bakish has been named as president and chief executive. ViacomCBS will be controlled by holding company National Amusements.
Previous attempts to re-combine CBS and Viacom failed due to differences between executives and investors over valuations and hierarchical structure.
In addition to its US operations, ViacomCBS will operate in the UK, Australia and Argentina. It is hoping to make savings of some $500m as a result of deal, and by combining movie studios, cable channels and US TV shows including 60 Minutes and The Big Bang Theory.
Publicly traded companies in this story:
|CBS||CBS 40.77 +1.43 +3.64%|
|Viacom||VIAB 22.81 -0.20 -0.85%|