Thirteen years after Viacom spun off CBS as a wholly owned subsidiary, the two companies are re-merging under the same corporate umbrella.
The two entertainment companies Aug. 13 announced a definitive agreement to combine in an all-stock $30 billion merger, creating a combined company — ViacomCBS Inc. — with more than $28 billion in revenue.
CBS shareholders will own approximately 61% of the combined company and Viacom shareholders will own approximately 39%.
The combined company will be led by Bob Bakish, current CEO of Viacom, with Joe Ianniello, acting CEO at CBS, becoming president/CEO of CBS.
The two companies, whose assets include Paramount Pictures, BET, MTV, Comedy Central, Showtime, CBS All Access, among others, expect to save $500 million in combined synergies — about half of what they originally sought.
The pact was spearheaded by Shari Redstone, who runs National Amusements Inc., parent to both Viacom and CBS, for her ailing father, Sumner Redstone. NAI holds approximately 78.9% and 79.8% of the Class A voting shares of CBS and Viacom, respectively.
Shari Redstone has eyed the reunion as a means for Viacom and CBS better competing against a rapidly evolving media landscape, which includes subscription streaming video-on-demand.
“My father once said ‘content is king,’ and never has that been more true than today,” Redstone said in a statement. “Through CBS and Viacom’s shared passion for premium content and innovation, we will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry.”
ViacomCBS contends it would be better able to scale globally, with leadership positions in markets across the U.S., Europe, Latin America and Asia.
In addition to a significant television business in the U.S., the combined company possesses a portfolio of direct-to-consumer platforms, including both subscription (CBS All Access, Showtime OTT) and ad-supported (Pluto TV) offerings. It also includes Paramount Pictures and Paramount Home Entertainment.
“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,” Bakish said in a statement.
Ianniello said the merger brings a new set of opportunities to both companies.
“At CBS, we have outstanding momentum right now — creatively and operationally — and Viacom’s portfolio will help accelerate that progress,” Ianniello said.
In addition to Bakish and Ianniello, the company will include Christina Spade as EVP and Chief Financial Officer, and Christa D’Alimonte as EVP, General Counsel and Secretary.
The deal was originally delayed after former CBS boss Les Moonves sought the CEO position among the combined companies. Shari Redstone wanted Bakish.
Moonves dropped out of discussions when he was forced out at CBS following a series of #MeToo allegations.