, two television programming companies that split more than a decade ago, finalized a merger deal Tuesday to recombine, creating a single entity with about $30 billion in market value. The new company, which will be called ViacomCBS, brings brands like CBS and Showtime together with the likes of Nickelodeon, MTV, BET, Comedy Central and Paramount.
A CBS-Viacom reunion is the latest in a wave of mergers and acquisitions of traditional media companies, as they try to come to grips with the scale of their emerging competitors in the tech world. Netflix and YouTube dominate eyeballs online, and companies like
and Amazon, with market caps hovering around $1 trillion, are delving more deeply into video programming. In response, legacy media companies are consolidating to bulk up.
Following megadeals like AT&T buying Time Warner and Disney taking over Fox, CBS and Viacom become the latest to turn to M&A as they face a changing landscape where streaming's on the rise and traditional pay-TV is slipping.
(Disclosure: CBS Corp. is the parent of CNET.)
During a call with analysts, executives said they hoped to bulk up CBS All Access with kids programming from Viacom, which owns Nickelodeon. Executives added that they continue to like the idea of pricing CBS All Access under $10 a month because they remain interested in driving up subscribers.
One of the key motivations for combining, they said in a joint release, was streaming video. CBS and Viacom said a merged company would be in a better position to accelerate a "direct-to-consumer" strategy -- industry jargon for streaming services that don't involve any traditional TV distributor like a cable company. The companies collectively operate CBS All Access and Showtime's streaming option, along with Pluto TV (a free streaming TV service in the US) and newcomers such as CBSN, ET Live and niche players like Noggin. They noted that the merger could give them opportunities to expand their streaming internationally.
The companies also said their merger will improve opportunities in advertising and deals with distributors and create a stronger player to license their catalog to other platforms worldwide.
The companies said they expect the deal, which still needs to win regulatory approval and clear other conditions, will close by the end of this year. Viacom shares will be converted into shares of CBS, with CBS shareholders owning about 61% of the combined company, and Viacom the rest.
Viacom's head, Bob Bakish, will lead the combined company as president and CEO, while CBS's leader, Joe Ianniello, will serve as chairman and CEO of CBS proper.
"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 maximize our business for today, while positioning us to lead for years to come," Bakish said in a statement.
Originally published August 13, 12:23 p.m. PT.
Update, 2:25 p.m. PT: With comment from executives on call.