2019 merger of CBS and Viacom

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2019 merger of CBS and Viacom
CBS Corporation logo.svg
CBS Corporation logo before the merger
Viacom (Picton Blue).svg
Viacom logo before the merger
ViacomCBS.svg
ViacomCBS logo used from the merger until 2022
Initiator CBS Corporation
Target Viacom
TypeMerger
CostUS$15.4 billion
InitiatedAugust 13, 2019
CompletedDecember 4, 2019
Resulting entityViacomCBS (now Paramount Global)

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.

Contents

Background

The evolution of Paramount
Paramount Global Logo.svg
1912 Famous Players Film Company is founded by Adolph Zukor
1913Lasky Feature Play Company is founded by Jesse Lasky
1914 Paramount Pictures is founded as a film distributor by W. W. Hodkinson
1916Famous Players & Lasky merge as Famous Players–Lasky and acquire Paramount.
1920 Group W forms with the launch of KDKA-AM
1927 CBS is founded; Famous Players–Lasky assumes Paramount's name
1929Paramount buys 49% of CBS
1932Paramount sells back shares of CBS.
1950 Desilu is founded & CBS distributes its television programs
1952CBS creates the CBS Television Film Sales division
1958CBS Television Film Sales renamed to CBS Films
1966 Gulf+Western buys Paramount
1968Gulf+Western acquires Desilu and renames it Paramount Television; CBS Films becomes CBS Enterprises
1970CBS Enterprises renamed to Viacom
1971Viacom is spun off from CBS as a separate company
1985Viacom buys full ownership of Showtime & MTV Networks
1986 National Amusements buys Viacom
1989Gulf+Western renamed to Paramount Communications
1994Viacom acquires Paramount Communications
1995 Westinghouse buys CBS
1997Westinghouse renamed to CBS Corporation
2000Viacom buys CBS Corporation
2001Viacom buys BET Networks
2005Viacom splits into second CBS Corporation and Viacom
2019CBS Corporation and Viacom re-merge to form ViacomCBS
2022ViacomCBS changes its name to Paramount Global

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 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. [5] 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 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 and its leadership. [8] [9]

Eventually, on May 14, 2018, CBS 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 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 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' resignation (September 2018–August 2019)

On September 9, 2018, Les Moonves exited CBS following multiple accusations of sexual assault. National Amusements agreed to make no proposal of a CBS-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'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 acquiring Starz from Lionsgate. [15] Reports said that CBS and Viacom reportedly set August 8 as an informal deadline for reaching an agreement to recombine the two media companies. [16] [17] CBS announced 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 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, Joseph Ianniello, overseeing CBS-branded assets. [19] On August 7, CBS 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 and Viacom officially announced their merger; the combined company is named ViacomCBS ; Shari Redstone serves as the chairwoman of the new company. [22] [23] [24] Upon the merger agreement, Viacom and CBS 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 delist its shares on the New York Stock Exchange (NYSE). [25] [26] On November 25, 2019, Viacom and CBS 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

Divested

See also

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