Redstone, who had pushed for the companies to explore a merger, is reversing course and now backs Viacom CEO Bob Bakish and his plan to bring the company back to prominence. Redstone now wants Viacom to remain an independent company, and a letter from her National Amusements is expected to be released shortly, according to sources on both sides of the proposed deal.
The two companies had engaged in preliminary conversations about a merger, but CBS had yet to make a bid for Viacom.
The Redstone family, who own the majority of voting shares of CBS and Viacom through their privately held National Amusements, had proposed recombining the two media giants a decade after they split up. Shari Redstone had cited increased scale as one reason for the merger.
“Based on our assessments of the strengths, progress and future prospects of both companies, we are requesting that the boards discontinue their discussions at this time and focus instead on their independent paths forward,” said Sumner and Shari Redstone, who control the movie-exhibition chain that holds majority investments in both companies, in a letter sent Monday.
Variety reports the maneuver represents an abrupt turnaround by the Redstone family, which has steadily prodded both companies to consider joining anew. The elder Redstone had merged CBS with Viacom in 2000, only to pull them apart six years later.
In November, Shari Redstone made a case for the two companies to return to the altar. Speaking at a conference organized by The New York Times, she suggested scale, or the ability to reach audiences across a variety of media venues, had become more important to both consumers and advertisers. In an era of mergers between Comcast and NBCUniversal, Charter Communications and Time Warner Cabje, and AT&T and DirecTV, she argued, CBS and Viacom might have more leverage as as distribution companies gained more sway.
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