CBS and Viacom to reunite in massive merger
CBS and Viacom, two of the leading entertainment companies in the United States, announced an agreement on Tuesday to reunite in a massive all-stock merger after 13 years apart, creating an American media conglomerate valued at about 30 billion U.S. dollars to cope with the increasingly drastic market competition in the country's media industry.
The market value of CBS is currently about 18 billion dollars and Viacom has a market capitalization of about 12 billion dollars. The combined entity will have about 28 billion dollars in revenue. CBS and Viacom were once part of the same company. They were formally united in 2000 but split up six years later.
"The combined company, ViacomCBS Inc., will be a leading global, multiplatform, premium content company, with the assets, capabilities and scale to be one of the most important content producers and providers in the world. The combined company will be a scale player globally, with leadership positions in markets across the U.S., Europe, Latin America and Asia," said the two companies in a statement, adding that the combined company will have the largest television business in the United States, with the highest share of broadcast and cable viewing across all key audience demographics, and strength in every key category, including news, sports, general entertainment, pop culture, comedy, music and kids.
The combined company will include a major Hollywood film studio, Paramount Pictures, which has been a subsidiary of Viacom since 1994. Paramount, the second oldest surviving film studio in the United States, is a producer and global distributor of filmed entertainment for more than a century.
The combined company will possess a portfolio of powerful consumer brands, including CBS, Showtime, Nickelodeon, MTV, BET, Comedy Central and Paramount Network. It will have an iconic library of 140,000+ premium TV episodes and 3,600+ film titles and reunites fan-favorite franchises such as "Star Trek" and "Mission: Impossible." The combined company will also have more than 750 series currently ordered or in production.
The combined company will be one of the largest content spenders, with more than 13 billion dollars spent in the last 12 months and will be a broadcast and cable leader in key markets around the world, reaching more than 4.3 billion cumulative TV subscribers.
According to the two companies, the new media conglomerate will have 22 percent of the U.S. television viewing audience, larger than Disney, Comcast and other major rivals.
Bob Bakish, president and CEO of Viacom, will become president and CEO of the combined company.
"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," said Bakish.
"Our unique ability to produce premium and popular content for global audiences at scale - for our own platforms and for our partners around the world - will enable us to maximize our business for today, while positioning us to lead for years to come," he added.
Joe Ianniello, president and acting CEO of CBS, will become chairman and CEO of CBS.
"This merger brings an exciting 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," said Ianniello, who will oversee all CBS-branded assets in his new role.
The combination of CBS and Viacom is the latest in a wave of mergers of entertainment giants in U.S. media industry. AT&T completed its purchase of Time Warner for about 85 billion dollars in June last year. The Walt Disney Company closed its 71.3-billion-U.S.-dollar acquisition of 21st Century Fox in March this year.