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CBS, Viacom to combine as ViacomCBS
Posted on Wednesday, 14 August 2019 09:31
Entertainment powerhouses CBS and Viacom are reuniting via an all-scrip merger that will result in a USD 28.20 billion-revenue cable-to-movie studio giant with the largest market share of the US television audience.
Existing CBS shareholders will own 61.0 per cent of the combined entity following the exchange of 0.59 voting class A and non-voting class B stock for each item of Viacom’s voting class A and non-voting class B stock, respectively.
Known as ViacomCBS, the combined company will be a foremost global, multiplatform, premium content company, with the assets, capabilities and scale to be one of the most important content producers and providers in the world.
It is expected to be a scale player globally, with leadership positions in markets across the US, Europe, Latin America and Asia.
This includes the largest television business in the US, with the highest share of broadcast and cable viewing across all key audience demographics, and strength in every key category, including news, sports, pop culture, comedy and kids.
Fast-growing direct-to-consumer platforms will be housed alongside major Hollywood film studio Paramount Pictures, which has produced and globally distributed filmed entertainment for more than a century.
ViacomCBS’s content library should comprise 140,000 or more TV episodes and over 3,600 film titles, not to mention more than 750 series currently ordered or in production.
As well as being among the biggest content spenders in the industry, with more than USD 13.00 billion spent in the last 12 months, it should have a global reach of more than 4.30 billion cumulative TV subscribers in 180+ countries.
With regards to finances, ViacomCBS had pro forma adjusted operating income before depreciation and amortisation of USD 6.30 billion, adjusted operating profit of USD 5.90 billion and net debt of USD 17.40 billion.
In spite of the combination, the resulting entity will remain a relatively small player against the likes of, for example, Disney or Netflix, in terms of market capitalisation and content.
However, by bulking up, CBS and Viacom should be better positioned to negotiate distribution terms or compete within streaming.
Sources told NBC News that Shari Redstone, president of National Amusements, which is the controlling shareholder of the two entertainment giants, had discussed the possibility of pursuing additional acquisitions to further scale up.
“The CBS-Viacom merger is, to her, a starting line, not a finish line,” one of the people familiar with the situation told the news division of the US broadcast television network NBC.
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