Board members from CBS Corp. and Viacom are expected to meet as soon as next week to begin discussions on the valuations of both companies for a possible merger.
Variety reports executives at both media companies have been hip-deep in crunching numbers and preparing financial data to guide the discussions between the members of the special committees assembled to consider options for a CBS-Viacom reunion. The deal is expected to be structured as an all-stock transaction with CBS as the acquiring entity and CBS Corp. CEO Leslie Moonves leading the combined entity. The valuation of Viacom is seen as the biggest hurdle that the sides will have to navigate.
Reps for CBS and Viacom declined to comment. The two companies were brought together by media mogul Sumner Redstone in a merger in 2000 but were split up again six years later out of Redstone’s frustration at a sagging stock price. Redstone’s National Amusements has firm control of both companies through his preferred voting shares. National Amusements, now steered by CBS and Viacom vice chair Shari Redstone, the mogul’s daughter, has been pushing the sides to recombine in the face of the overall upheaval in the global media landscape.
The Wall Street Journal reports CBS is clearly eager to ramp up its international presence. It acquired Australia’s Network Ten last year, and plans to roll out its streaming services, CBS All Access and Showtime, in Canada, Australia and Europe. Viacom’s international infrastructure could help sell CBS content in key markets overseas—an obvious revenue synergy that goes overlooked if the international business isn’t appreciated.
In fact, the strategy Viacom has deployed abroad—using local broadcast networks to leverage its flagship brands, like Nickelodeon, MTV, and Comedy Central—could be a model for merging CBS content with Viacom’s distribution capabilities.
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