CBS, Viacom merger unlikely
Redstone family calls off proposed union of media giants
The anticipated merger of CBS Corp. and Viacom now appears unlikely.
Shari Redstone, whose family owns controlling stakes in the two media companies, has changed her mind and withdrawn her proposal for them to merge.
Signs of improvement at Viacom, under newly appointed CEO Bob Bakish prompted the family to withdraw the proposal, according to a letter co-written by billionaire media mogul Sumner Redstone and his daughter, Shari Redstone and sent Monday to the boards of Viacom and CBS. Analysts also have said Les Moonves, CBS Corp.’s chairman and CEO, has been reluctant to take on the deal, fearing that turning around Viacom would be too daunting and burdensome for CBS.
The merger proposal, pitched by the Redstones in September, would have created a media giant with sizable operations in broadcast and cable networks, Hollywood, sports programming and children’s television, as well as publishing and digital ventures.
Viacom owns Paramount Pictures, Nickelodeon, Comedy Central, MTV and BET. CBS runs its namesake broadcast network, Smithsonian Channel, Showtime, Simon & Schuster and CBS Sports Network.
The letter Monday was issued through the Redstones’ privatelyheld theater chain company National Amusements Inc., which owns 80% of the voting stock of Viacom and CBS. Sumner Redstone, who was board chairman of Viacom and CBS until he stepped down this year, is CEO of NAI and Shari Redstone is president. Sumner Redstone, 93, is in frail health, and it is widely believed Shari Redstone controls the family’s business affairs.
“Over the past few months, after careful assessment and meetings with the leadership of both companies, we have concluded that this is not the right time to merge the companies,” the letter read. “... We have been very impressed with the forward-looking thinking and strategic plan being pursued under Bob Bakish’s leadership.”
Later Monday, Viacom named Bakish, who had served as acting CEO since Nov. 15, the company’s official CEO, president and to the company’s board.
Shares of Viacom fell 7.5% Monday to $34.99. CBS slipped 38 cents to $62.18.