CBS and Viacom, two television programming companies that split more than a decade ago, finalized a merger deal Tuesday to recombine, creating a single entity with about $30 billion in market value. It'll bring brands like CBS and Showtime together with the likes of Nickelodeon, MTV, BET, Comedy Central and Paramount.
A CBS-Viacom reunion is the latest in a wave of takeovers and mergers of traditional media companies, as they come to grips with the scale of their emerging competitors in the tech world. Netflix and YouTube dominate eyeballs online, and companies like Apple and Amazon, boasting market caps that flirt with $1 trillion, are delving more deeply into video programming. In response, legacy media companies are consolidating to bulk up.
Alongside with AT&T buying Time Warner and Disney taking over Fox, CBS and Viacom are the latest turning to mergers and acquisitions as they face new heavyweight competitors and a changing landscape with streaming on the rise and traditional pay-TV on the downfall.
(Disclosure: CBS Corp. is the parent of CNET.)
The companies said they expect the deal, which will still need to win regulatory approval and clear other conditions, will close by the end of this year. It will convert Viacom shares into shares of CBS, with CBS shareholders owning about 61% of the combined company and Viacom, about 39%.
One of the key strategies for combining, they said in a joint release, was streaming video. CBS and Viacom said that a merged company is in a better position to accelerate a "direct-to-consumer" strategy, industry jargon for streaming services that don't involve any traditional TV distributor like a cable company. The companies collectively operate CBS All Access and Showtime's streaming option; Pluto TV, the free streaming TV service in the US; and newcomers such as CBSN, ET Live and niche players like Noggin. They noted that the merger could give them opportunities to expand their sRead More – Source