(MENAFN – Jordan Times) NEW YORK – After some false starts, CBS and Viacom announced Tuesday they will combine to form the latest media empire in a wave of mergers driven by the need for companies to reform themselves for the streaming era.
The new company will have more than $ 28 billion in revenue and comprise brands such as MTV, Comedy Central and Showtime, as well as Paramount Pictures and publisher Simon & Schuster.
The transaction will have an ability to develop original programming that can win subscribers to premium channels, score well with advertisers and resonate with audiences in international markets, the companies said.
The deal recombines two entities that were under the same corporate umbrella until they were broken apart in 2006 by Sumner Redstone, chairman emeritus of National Amusements, which holds almost 80 for cent of both companies.
The deal comes on the heels of other large transactions on average, including Disney's $ 71.3 billion acquisition of key assets from Rupert Murdoch's 21st Century Fox, and AT & T's $ 85 billion purchase of Time Warner.
"Said Redstone, who will chair the new company, ViacomCBS."
"My father once said 'content is king,' and never has been more true than today," she said in a statement. "We will establish a world-class, multi-platform media organization that is well-positioned for growth in a rapidly transforming industry."
Two companies failed to take off to mergers, two CBS chief executives Les Moonves, who was ousted in September 2018 amid sexual harassment allegations.
Joining forces will allow them to bolster investment in premium entertainment and boost their global reach, with broadcast networks in Britain, Argentina and Australia and content in 45 languages, the companies said in a press release. The deal also should result in $ 500 million in annual savings.
"Tilted," said Tuna Amobi, analyst at CFRA Research. "It gives them a better chance to compete."
Netflix, Hulu and other streaming ventures that erode the position of conventional cable packages and broadcasters unveil "over-the-top" options.
CBS itself has launched its "All Access" service which provides on-demand programming for $ 5.99 per month with limited commercial interruptions or $ 9.99 per month for ad-free service.
In November, Disney plans to launch a new "Disney +" service at a starting price of $ 6.99 monthly that offers its films and television shows as well as the library it acquired through the Fox deal.
Under the all-stock transaction in the latest tie-up, existing CBS shareholders will own 61 per cent of the company, while Viacom shareholders will own 39 per cent. Bob Bakish, chief executive of Viacom, will take on that post in the newly-combined company, while Joe Ianniello, acting chief executive at CBS, will become chairman and CEO of CBS, overseeing CBS-branded assets.
Shares of Viacom fell 5.6 per cent to $ 30.75, while CBS rose 1.4 per cent to $ 48.70.
. (TagsToTranslate) (MENAFN (t) – (t) Jordan (t) Times) (t) NEW (t) YORK (t) – (t) After (t) some (t) false (t) starts (t) CBS (t) and (t) Viacom (t) Announced (t) on (t) Tuesday (t) they (t) will (t) combine (t) to (t) form (t) the (t) latest ( t) average (t) empire (t)