2019 merger of CBS and Viacom explained

Logo2:	Viacom (Picton Blue).svg
Logo2 Caption:	Viacom logo before the merger
Logo3:	ViacomCBS (2019-2020).svg
Logo3 Caption:	ViacomCBS logo used from the merger until 2020
Initiator:	CBS Corporation
Target:	Viacom
Type:	Merger
Cost:	15.4 billion
Initiated:	August 13, 2019
Completed:	December 4, 2019
Resulting Entity:	ViacomCBS (now Paramount Global)
Logo2 Size:	250px
Logo3 Size:	300px

The 2019 merger of CBS Corporation and Viacom was announced on August 13, 2019, and was completed on December 4, 2019. The merger of equals reunited CBS Corporation and Viacom into a single company known as ViacomCBS (today known as Paramount Global) after their separation from the first incarnation of Viacom on December 31, 2005. Both companies were owned by the theater company National Amusements, which remains the owner of the merged entity.

Background

The first incarnation of Viacom was created in 1952 as the television syndication division of CBS; it was spun off in 1971. In 1999, Viacom acquired its former parent, then named CBS Corporation (formerly Westinghouse Electric). On December 31, 2005, the first Viacom was spun off into two entities, the second incarnations of CBS Corporation and Viacom.

History

Early discussions of a merger (September 2016–September 2018)

Efforts to re-merge the two conglomerates began on September 29, 2016, when National Amusements sent a letter to Viacom and CBS Corporation encouraging a re-merger of the two companies.^[1] The proposal was later withdrawn on December 12 of that year.^[2]

On January 12, 2018, CNBC reported that Viacom had re-entered talks to merge back into CBS Corporation, after the merger plan of AT&T-Time Warner and Disney's acquisition of most 21st Century Fox assets were announced. Viacom and CBS Corporation also faced heavy competition from companies such as Netflix and Amazon.^[3] Shortly afterward, it was reported that the combined company could be a suitor for acquiring the film studio Lionsgate.^[4] Viacom and Lionsgate were both interested in acquiring The Weinstein Company (TWC).^[5] Following the Weinstein effect, Viacom was listed as one of 22 potential buyers that were interested in acquiring TWC. They lost the bid, and on March 1, it was announced that Maria Contreras-Sweet would acquire all of TWC's assets for $500 million.^{[6] [7]}

On March 30, 2018, CBS Corporation made an all-stock offer slightly below Viacom's market value, insisting that its existing leadership, including long-time chairman and CEO Les Moonves, oversee the re-combined company. Viacom rejected the offer as too low, requesting a $2.8 billion increase and that Bob Bakish be maintained as president and COO under Moonves. These conflicts had resulted from Shari Redstone seeking more control over CBS Corporation and its leadership.^{[8] [9]}

Eventually, on May 14, 2018, CBS Corporation sued its and Viacom's parent company National Amusements and accused Redstone of abusing her voting power in the company and forcing a merger that was not supported by it or Viacom.^{[10] [11]} CBS Corporation also accused Redstone of discouraging Verizon Communications from acquiring it, which could have been beneficial to its shareholders.^[12]

On May 23, 2018, Les Moonves explained that he considered the Viacom channels to be an "albatross," and while he favored more content for CBS All Access (now Paramount+), he believed that there were better deals for CBS Corporation than the Viacom deal, such as Metro-Goldwyn-Mayer (MGM), Lionsgate Films or Sony Pictures. Moonves also considered Bakish a threat because he did not want an ally of Redstone as a board member of the combined company.^[13]

Talks following Les Moonves's resignation (September 2018–August 2019)

On September 9, 2018, Les Moonves exited CBS Corporation following multiple accusations of sexual assault. National Amusements agreed to make no proposal of a CBS Corporation-Viacom merger for at least two years after the date of the settlement.^[14]

On May 30, 2019, CNBC reported that CBS Corporation and Viacom would explore merger discussions in mid-June. CBS Corporation's board of directors was revamped with people who were open to merging; the re-merger was made possible with the resignation of Moonves, who had opposed all merger attempts. The talks had started following rumors of CBS Corporation acquiring Starz from Lionsgate.^[15] Reports said that CBS Corporation and Viacom reportedly set August 8 as an informal deadline for reaching an agreement to recombine the two media companies.^{[16] [17]} CBS Corporation announced its plan to acquire Viacom as part of the re-merger deal for up to $15.4 billion.^[18]

On August 2, 2019, it was reported that CBS Corporation and Viacom agreed to merge back into one entity. Both companies came to an agreement on the management team for the merger, with Bob Bakish serving as CEO of the combined company with president and acting CEO of CBS Corporation, Joseph Ianniello, overseeing CBS Corporation-branded assets.^[19] On August 7, CBS Corporation and Viacom separately reported their quarterly earnings as the talks about the re-merger continued.^{[20] [21]}

Completion (August 2019–December 2019)

On August 13, 2019, CBS Corporation and Viacom officially announced their merger; the combined company was named ViacomCBS; Shari Redstone serves as the chairwoman of the new company.^{[22] [23] [24]} Upon the merger agreement, Viacom and CBS Corporation jointly announced they expected the transaction to close by the end of 2019, pending regulatory and shareholder approvals.^[24] Such mergers require approval by the Federal Trade Commission (FTC).^[24]

On October 28, 2019, the merger was approved by National Amusements, which then announced the deal would close in early December; the recombined company will trade its shares on NASDAQ under the symbols "VIAC" and "VIACA" after CBS Corporation delisted its shares on the New York Stock Exchange (NYSE).^{[25] [26]} On November 25, 2019, Viacom and CBS Corporation announced that the merger would close on December 4, and its shares began to trading on NASDAQ on December 5.^{[27] [28]} The merger officially closed on December 4, 2019.^[29]

Affected assets

• CBS Television Studios – renamed to CBS Studios.
  • CBS Television Distribution – renamed to CBS Media Ventures in 2021.
    • Terrytoons – Theatrical library moved to Paramount Pictures through Melange Pictures, LLC
    • Spelling Television (from CBS) – library reunited with the Republic Pictures' (from Viacom) Television library.
• Showtime Networks (from CBS) was organized with BET Networks (from Viacom) under the Premium Network Group.
  • BET Networks was later moved to the CBS Entertainment Group.
• MTV, CMT, and other single-branded Viacom and CBS networks were organized under the MTV Entertainment Group.
  • VH1 became part of BET Networks, which was moved under the CBS Entertainment Group.
• Paramount Television (second incarnation by Viacom) – renamed Paramount Television Studios to avoid confusion with the first incarnation (now CBS Studios), later was folded in 2024.
• CBS Interactive – renamed to ViacomCBS Streaming (later Paramount Streaming)
  • CBS All Access – relaunched as Paramount+ on March 4, 2021; merging with the original Nordics SVOD version which was launched in 2017 and the original Latin American SVOD version which was launched in 2019.
    • Nordics, Hungary and Poland SVOD version of Paramount+ – rebranded as SkyShowtime; joint venture with Comcast-owned Sky Group.
  • Streaming service Showtime – bundled with Paramount+ in 2022 and merged in 2023.
• CBS Consumer Products and Nickelodeon & Viacom Consumer Products (NVCP) are merged; eventually rebranded as ViacomCBS Consumer Products (later Paramount Consumer Products)
• CBS Cable Networks and Viacom Media Networks are merged; with eventually rebranded as ViacomCBS Domestic Media Networks (later Paramount Media Networks)

Divested

• CBS Productions – folded into the original Paramount Television (now CBS Studios) on November 28, 2019.
• CBS Films – former mini-major studio; absorbed into the main CBS Entertainment Group (CBS Studios) with the theatrical distribution moved to Paramount Pictures in 2019.
• CNET Media Group – sold to Red Ventures on October 30, 2020.
  • GameRankings – absorbed into Metacritic on December 9, 2019.
• CBS Building/Black Rock – sold to Harbor Group International.
• CBS Studio Center – sold to Hackman Capital Partners and Square Mile Capital Management.
• Simon & Schuster – sold to Kohlberg Kravis Roberts.

See also

• Acquisition of NBC Universal by Comcast, a similar media merger but entirely vertical scale.
• Acquisition of 21st Century Fox by Disney, a corporate act of The Walt Disney Company which acquired most of 21st Century Fox assets, mostly film and television studios and entertainment pay-TV channels.
• Concentration of media ownership

Notes and References

1. Web site: National Amusements Proposes Viacom, CBS Reunion, Cites "Substantial Synergies". Szalai. George. The Hollywood Reporter. September 29, 2016. October 13, 2016.
2. Web site: Shari Redstone withdraws CBS-Viacom merger proposal. CNBC. December 12, 2016. December 17, 2016.
3. Web site: Viacom, CBS shares spike after report Shari Redstone pursuing merge of companies. Wang. Christine. January 12, 2018. CNBC. January 12, 2018.
4. Web site: Lionsgate Ripe For Takeover As Amazon, Verizon and CBS-Viacom Emerge As Potential Suitors. Busch. Anita. Chmielewski. Anita. Deadline Hollywood. January 17, 2019. January 19, 2018.
5. Web site: Weinstein Co Talking to 22 Buyers, $300 Million Expected Price, Bob Weinstein Must Exit. October 26, 2017. The Wrap. October 26, 2017.
6. Web site: Former Obama administration official has reached a deal to buy Weinstein Co. assets. Ryan Faughnder. March 1, 2018. Los Angeles Times. March 2, 2018.
7. Web site: TWC Board, New York AG Confirm Maria Contreras-Sweet Group Has Acquired Weinstein Company Assets. Chmielewski. Dawn. March 2, 2018. Deadline Hollywood. March 2, 2018.
8. News: Moonves vs. Redstone: Inside the Poisonous War for Control of CBS and Viacom. The Hollywood Reporter. 2018-04-11. en.
9. News: Could CBS-Viacom Strife Cause Leslie Moonves to Walk Away?. Littleton. Cynthia. 2018-04-11. Variety. 2018-04-11. en-US.
10. News: CBS Takes Redstones to Court as Hopes Fade for a Viacom Deal. 2018-05-14. Bloomberg.com. 2018-05-14. en.
11. News: National Amusements Fires Back At CBS Suit, Says It's "Outraged" By Allegations. Chmielewski. Dawn C.. 2018-05-14. Deadline. 2018-05-14. en-US.
12. News: Verizon Expressed Interest In Acquiring CBS Before Viacom Talks Heated Up. Chmielewski. Dawn C.. 2018-05-14. Deadline. 2018-05-26. en-US.
13. News: Behind Leslie Moonves' Crusade to Save CBS From Viacom. Bond. Paul. 2018-05-23. The Hollywood Reporter. 2018-05-26. en-US.
14. News: Leslie Moonves Exits CBS After Being Accused of Sex Crimes, Violence by More Women. Parker. Ryan. September 9, 2018. The Hollywood Reporter. en-US.
15. News: CBS and Viacom merger negotiations expected to resume. James. Meg. May 30, 2019. Los Angeles Times. 2019-06-02.
16. News: CBS, Viacom set early August deadline for remerger agreement – report. Munson. Ben. July 16, 2019. FierceVideo. 2019-07-20.
17. News: CBS, Viacom Boards Wrestle With Post-Merger Management Decisions, Ending COO Role (EXCLUSIVE). Littleton. Synthia. July 19, 2019. Variety. 2019-07-20.
18. News: Shari Redstone's Vision of a Merged CBS-Viacom Begins to Take Shape. CBS' plan to acquire Viacom for up to $15.4 billion could be announced Aug. 8, giving its controlling shareholder the ability to leverage IP like 'Star Trek' across film and TV to better compete with Disney, Netflix and the rest.. July 19, 2019. The Hollywood Reporter. August 7, 2019.
19. News: CBS, Viacom Reach Tentative Deal on Team to Lead Combined Company. The Wall Street Journal. August 2, 2019. subscription. August 3, 2019.
20. Web site: CBS-Viacom Deal Won't Make Deadline. Lafayette. Jon. August 7, 2019. Broadcasting Cable.
21. Web site: CBS & Viacom's Merger Announcement is Reportedly Delayed as Talks Continue. Bouma. Luke. August 7, 2019. Cord Cutters News.
22. Web site: CBS, Viacom agree to merge, forming a $28B entertainment firm. Gasparino. Charles. Moynihan. Lydia. Fox Business. August 13, 2019. August 13, 2019.
23. Web site: CBS, Viacom Strike Deal to Recombine. The Hollywood Reporter. August 13, 2019. August 15, 2019. George. Szalai. Paul. Bond. Etan. Vlessing.
24. Web site: CBS and Viacom To Combine. CBS. August 12, 2019. https://web.archive.org/web/20190813190148/https://www.cbscorporation.com/wp-content/uploads/2019/08/ViacomCBS-Press-Release-FINAL.pdf. August 13, 2019. dead.
25. Web site: Viacom, CBS Set to Merge in Early December. Steinberg. Brian. Variety. October 28, 2019. October 28, 2019.
26. Viacom-CBS Merger Now Expected to Close in 'Early December'. Weprin. Alex. Billboard. October 29, 2019. October 29, 2019.
27. Web site: CBS Corporation and Viacom Inc. Announce Expected Closing Date of Merger. November 25, 2019. Business Wire. en. November 26, 2019.
28. Web site: CBS and Viacom Reveal December Merger Date - Mark Your Calendars. November 25, 2019.
29. Web site: Bob Bakish's Memo to ViacomCBS Staff: Merger "A Historic Moment". The Hollywood Reporter. December 4, 2019. December 4, 2019. Alex. Weprin.