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Broadcasting industry

Viacom and CBS Merge in $34.45 Billion Media Deal

Strategic Insights

— 1 min read

Viacom Inc. is purchasing CBS Corp. in a record-breaking stock deal worth $34.45 billion, creating a major media and entertainment giant with a vast array of TV networks, movie studios, and cable channels. The merged company will keep the Viacom name, with Sumner Redstone as chairman and CEO, and Mel Karmazin as president and COO. This move reunites two formerly separate companies that were split apart by government regulations in the 1970s. The new Viacom will own the CBS network, as well as several major cable networks, including MTV, VH1, and Nickelodeon, along with film studio Paramount.

Key Takeaways:

  • The merger creates a giant media company with a top TV network, movie studio, and several cable channels, worth $34.45 billion.
  • Viacom Chairman Sumner Redstone will be chairman and CEO of the new company, while CBS President Mel Karmazin will be president and COO.
  • CBS shareholders will receive 1.085 shares of Viacom's class B stock, valuing CBS at $48.89 per share.
  • The merged company will own 19 TV stations (Viacom) and 16 TV stations (CBS), with plans to share programming, equipment, and personnel to cut costs.
  • The deal reunites two companies split apart by government regulations in the 1970s and marks a new chapter in Sumner Redstone's long career as a media executive.
  • The pact comes just a month after the FCC relaxed television station ownership rules, triggering a wave of merger discussions among media companies.

Statistics:

  • $34.45 billion: The value of the Viacom-CBS merger in stock.
  • 1.085: The number of Viacom class B shares that CBS shareholders will receive per share.
  • $48.89: The valuation of CBS at the time of the deal, based on Friday's close of $45.06 1/4.
  • 19: The number of TV stations owned by Viacom.
  • 16: The number of TV stations owned by CBS, pending acquisitions.
  • 6: The number of years since Sumner Redstone took control of Viacom in 1987.
  • 50: The percentage of stake Viacom owns in the UPN network.

Sources:

  • "Viacom CBJM Announces $34.45-Billion Merger with CBS Corp". AP News.

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