Mumbai: International Media Landscape has witnessed Mega Merger and Acquisition (M&A) deal in the recent past such as Disney’s acquisition of most of 21st Century Fox and AT&T’s effort to buy up Time Warner. Now in a major development, Viacom and CBS Corporation have formed special committees to evaluate a potential combination that marks the first step in a potential reuniting of the companies.
However, A merger deal between CBS and Viacom would not stop at that level and instead it is likely to make way for another Mega M&A activity in international Media and Broadcast Space that will be happening between CBS and Verizon.
A merger between CBS Corp and Verizon was being discussed in the recent months. However, it’s understood that the Redstones had previously hesitated at deal making opportunities involving CBS Corp with out inclusion of Viacom in the bouquet.
Redstone’s National Amusements, which owns a controlling stake in both media companies, expressed its support of the formal start of merger talks. National Amusements president Shari Redstone, who is Vice Chairman of CBS and Viacom, has urged the companies to consider a reunion, given the pressure in the media landscape by M&A among its traditional rivals — Disney’s acquisition of most of 21st Century Fox and AT&T’s effort to buy up Time Warner — and the entry into the content arena by digital and tech behemoths with extremely deep pockets.
“National Amusements supports the processes announced by CBS and Viacom to evaluate a combination of the two companies, which we believe has the potential to drive significant, long-term shareholder value,” the company said in a statement. “National Amusements does not currently intend to make any further comments regarding the process.”
Sumner Redstone, Now Chairman Emeritus of both firms, first brought CBS and Viacom together in 2000. The two were split up again in January 2006 out of Sumner Redstone’s frustration with dwindling stock price.
The companies both issued statements that said: “There can be no assurance that this process will result in a transaction or on what terms any transaction may occur.”
Given the recent developments in the international media broadcast space, the ongoing talks between CBS Corp. and Viacom are likely to materialize positively as they have taken the first steps toward negotiating a merger as both companies have established special board committees to evaluate the possibility of a deal.
CBS said Thursday its board has assembled a committee of independent directors to “evaluate a potential combination with Viacom Inc.” Viacom said it has “retained independent legal counsel and is retaining independent financial advisors in connection with this evaluation.”