Viacom and CBS yesterday announced a definitive agreement to merge the two companies in a transaction valued at $US80 billion, ($A123 billion) billed as the largest media deal ever.
Under the terms of the agreement, CBS shareholders will receive 1.085 Viacom Class B shares for each share of CBS, which at the September 3 closing price of $US45.06 per Viacom Class B share, is valued at $48.89 per CBS share, the companies said in a statement.
The merged company, to be called Viacom, will be led by Sumner Redstone, the chairman and chief executive officer of Viacom, and CBS president and CEO Mel Karmazin, who will become president and chief operating officer of the combined company, the companies said. On a pro forma basis, the new Viacom would have generated about $21 billion in 1998 revenue, the statement added.
Following the merger, Viacom will become one of the world's leading companies in the production, promotion and distribution of entertainment, news, sports and music, the statement said. The company's assets will include a growing portfolio of internet ventures in combination with broadcast and cable television, a motion picture studio, radio and outdoor media companies.
In late August, Viacom became the latest US media company to try its hand at establishing an internet-only company with the formation of MTV Interactive.