US media giants CBS and Viacom have agreed their long-awaited merger in a move that will have a significant impact on the African media industry.
Viacom and CBS are both controlled by the Redstone family’s National Amusements, which previously attempted to combine them on two separate occasions in 2016 and 2018.
Merger talks restarted earlier this year and the pair have now entered into a definitive agreement to combine in an all-stock merger to create ViacomCBS Inc, which will be led by Bob Bakish as CEO.
Viacom operates several pay TV channels in Africa, including MTV, MTV Base, BET, Nickelodeon, Nick Jr and Comedy Central. Its channels are available on platforms including MultiChoice’s DStv in South Africa and across sub-Saharan Africa through Viacom International Media Networks Africa..
The combined entity will generate more than US$28bn in revenue, according to CBS and Viacom, with a library of more than 140,000 TV episodes and more than 3,600 film titles. It will also have more than 750 series currently ordered to or in production, with a content spend of US$13bn in the past 12 months.
The merger will see CBS, Showtime and CBS All Access combined with Viacom’s cable channels, which include Nickelodeon, MTV, Comedy Central and BET, as well as its movie studio Paramount Pictures.
CBS’s other assets include The CW, its joint venture with Warner Bros Entertainment, plus Network 10 in Australia, CBS Television Studios, CBS Global Distribution Group, Pop and Smithsonian Networks.
Viacom also owns Channel 5 in the UK, Telefe in Argentina and Colors in India, the latter via its partnership with TV18, as well as AVoD service Pluto TV.
Joe Ianniello, who had been serving as president and acting CEO at CBS since replacing Leslie Moonves, will be chairman and CEO of CBS following the merger.
In addition to Bakish and Ianniello, the leadership team of the combined company will include Christina Spade as executive VP and chief financial officer and Christa D’Alimonte as executive VP, general counsel and secretary.
The board of directors will consist of 13 members: six independent members from CBS, four independent members from Viacom, the president and CEO of ViacomCBS and two National Amusements designees. Shari Redstone will be its chair.
Existing CBS shareholders will own approximately 61% of the combined company and existing Viacom shareholders will own approximately 39% on a fully diluted basis. The transaction is subject to regulatory approvals and other customary closing conditions. It is expected to close by the calendar end of this year.
Viacom bought Showtime owner CBS in 2000, only for the two firms to split six years later. Since then, CBS has enjoyed growth while Viacom has struggled to expand as planned, although it has added to its list of assets in recent years.
The merger follows Disney’s US$52bn acquisition of major 21st Century Fox assets and AT&T’s US$85bn purchase of Time Warner as the US media industry undergoes a major period of consolidation in the face of disruption from streaming giants.
Viacom and CBS said the combined company would be positioned to “accelerate and expand” its direct-to-consumer strategy through its subscription and ad-supported offerings.
Bakish said: “Today marks an important day for CBS and Viacom as we unite our complementary assets and capabilities and become one of only a few companies with the breadth and depth of content and reach to shape the future of our industry.
“Our unique ability to produce premium and popular content for global audiences at scale – for our own platforms and for our partners around the world – will enable us to maximise our business for today, while positioning us to lead for years to come.”
Shari Redstone, vice-chair of the boards of directors at CBS and Viacom, said: “My father [National Amusements boss Sumner Redstone] once said ‘content is king,’ and never has that been more true than today. Through CBS and Viacom’s shared passion for premium content and innovation, we will establish a world-class, multiplatform media organisation that is well positioned for growth in a rapidly transforming industry.