Media giants Viacom and CBS to merge in latest mega

The Viacom office in Hollywood Calif

The Viacom office in Hollywood Calif

The breadth and depth of the combined company's reach across both traditional and new platforms - including 22% of U.S. TV viewership - is expected to drive important new distribution and advertising opportunities. Well, consider that Alex Kurtzman now leads Star Trek's future on CBS All Access, with Discovery, Picard, Lower Decks, the untitled Section 31 series, and another unnamed animated TV show in the works.

These established players are also competing against internet companies including Amazon and Netflix, each of which have at least 100 million paying subscribers and are pouring billions into creating content. Walt Disney 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.

Shari Redstone, the president of National Amusements, the Redstone family holding company that controls CBS and Viacom, said: "I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets". He believed it would unlock the value of Viacom, which was broadcasting some of TV's most popular shows at a time when CBS was becoming less popular. The combined company is expected to accelerate and expand its direct-to-consumer strategy through subscription and ad-supported offerings, including CBS All Access and Showtime; Pluto TV, the leading free streaming TV service in the USA; and niche products such as CBSN, ET Live and Noggin. This is all sure to bring ViacomCBS Inc. into the conversation with Netflix, Disney+, and WarnerMedia as the streaming wars continue to heat up.

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 USA, United Kingdom and Latin America. Annually, it is estimated to generate about $28 billion in revenue.

The new company will be called ViacomCBS and Redstone's daughter, Shari Redstone, will be named chair. They've lost about 18 per cent since the beginning of 2018, as the broadcaster faced mounting challenges, including the ongoing competition for viewers with the likes of Netflix Inc. and the ouster of longtime CEO Les Moonves.

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After years of rumors and official talks, CBS and Viacom have officially agreed to merge into a single company after breaking up back in 2006. In response, legacy media companies are consolidating to bulk up. A merger was adamantly opposed by Leslie Moonves, the former powerful chair of CBS who was brought down in a sexual harassment scandal past year.

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.

Redstone will be chairwoman of the combined company's board. "We will establish a world-class, multiplatform media organisation that is well-positioned for growth in a rapidly transforming industry".

The stocks of CBS and Viacom both rose less than 2% in afternoon trading Tuesday, a reflection of Wall Street having anticipated this deal, especially in recent days.

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