CBS and Viacom said late Thursday that their respective boards of directors have formed special independent committees to evaluate the potential combination of both companies.
The move has been expected for weeks. CBS’ and Viacom’s split in 2005 and their largest individual shareholder National Amusements, headed by media mogul Sumner Redstone and his daughter Viacom and CBS vice chair Shari Redstone, tried to recombine the companies in 2016. That plan was abandoned later that year, but in recent weeks reports have surfaced that Shari Redstone had been interested in revisiting a merger. Viacom CEO Bob Bakish and CBS chairman and CEO Les Moonves were said to have had discussions about a possible merger last month and it was expected that talks would resume after a scheduled board meeting of both companies Feb. 1.
In a statement National Amusements said it “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.”
Whether the deal will happen remains to be seen. But some analysts have been pushing for a recombination for months. Moonves, who has resisted a merger in the past, is said to be more open to a deal in light of the recent consolidation activity in the industry. In October, AT&T announced a $108.7 billion merger plan with Time Warner and in December The Walt Disney Co. agreed to buy certain programming assets from 21st Century Fox for $66.1 billion. With its large content brethren getting even larger, some analysts believe that CBS could benefit from Viacom’s programming assets. Viacom, which has struggled with ratings declines and a sluggish ad market, could benefit from CBS’s position as the No. 1 broadcast network in carriage negotiations.
There were no details as to which directors are on the special committees or how long it will take to evaluate a possible merger. Both CBS and Viacom said they would have no comment until the process is complete.