CBS CBS Corp

By Benjamin Mullin and Dana Cimilluca 

CBS Corp. and Viacom Inc. are in the final stages of negotiating a deal that would reunite mogul Sumner Redstone's media empire in the hopes of creating a more formidable competitor to the entertainment industry's giants.

The two sides are still working out details, including the stock exchange ratio for the transaction, but have narrowed it down to a range of between 0.59 and 0.60 CBS share for each Viacom share, according to people familiar with the matter. That ratio would represent a small premium for CBS shareholders and value Viacom slightly below its market value as of Friday, which was about $12 billion.

The exchange ratio is crucial because it determines the price of a merger in an all-stock deal, such as the one under discussion between CBS and Viacom.

CBS shares were flat in early trading Monday, while Viacom shares fell 3.2%.

The all-stock deal, if completed, will bring under one roof such recognizable American media properties as Viacom cable channels like MTV and Nickelodeon, the Paramount film and TV studio and the CBS broadcast network.

There is still a chance that the price could fall outside that range or that the talks could break down, but the companies are hoping to announce a deal as early as Monday, the people said.

Shari Redstone, vice chairman of both companies, has said she believes that CBS and Viacom would be better positioned to compete with larger rivals as one company. She is president of National Amusements Inc., which controls both CBS and Viacom.

Viacom has been the weaker of the two companies over the past several years, having suffered as cable-TV cord-cutting pulled down ratings for its major networks. A merger with CBS would give Viacom greater scale and more leverage in negotiations with advertisers and cable-TV providers.

The deal, if it happens, will reverse a move, made in 2006, that cleaved Viacom's then-booming cable networks division from CBS's more mature TV business.

Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

August 12, 2019 11:03 ET (15:03 GMT)

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