For more than a decade of operating separately and failed negotiations, they announce that they are willing to merge again.
Through press released by both CBS and Viacom, the two Titans confirm that their boards have created special committees to “evaluate a possible combination.” However, they clarify that “there is no guarantee that this process will result in a transaction or on what terms this negotiation may occur.”
One of the majority shareholders of the two companies, Shari Redstone, daughter of media mogul Sumner Redstone, had long been pushing the idea for both companies to operate together, as they did from 2000 to 2006. But she found a brake: CBS CEO Leslie Moonves, who rejected the idea.
For investors in both companies, such a large move could be convenient, since the shares of both operators are going down, as they did three years ago, despite being part of a market in which the shares in general are on the rise.
Both Viacom and CBS recognize that they must grow to remain competitive in a media industry that now prioritizes the scale. Last year, The Walt Disney Company agreed to buy most of 21st Century Fox in an agreement that will form a colossus of entertainment for the streaming era. At the same time, AT&T is still negotiating an acquisition of Time Warner.
In case of a merger, the combined company would generate profits of approximately $ 27 billion, with 40% from advertisers, 30% of affiliate fees and another 30% of content and other minor segments, as predicted by UBS analyst John Hodulik.
In the event of a merger, the combined company would generate profits of approximately $27 billion, with 40% from the advertisers, 30% of the affiliate fees and another 30% of the contents and other minor segments, as predicted by the analyst from UBS John Hodulik.