- Creates a leading global, multiplatform, premium content
company, positioned to be one of the most important content
producers and providers in the world
- Portfolio of powerful consumer brands spanning all content
categories and demographics
- Iconic library of 140,000+premium TV episodes and 3,600+ film
titles
- Production capabilities across five continents, including more
than 750 series ordered to or in production
- One of a few major film studios operating on a global
basis
- Among the biggest content spenders in the industry, with more
than $13 billion spent in the last 12 months
- Diverse and fast-growing portfolio of direct-to-consumer
offerings
- Global reach of more than 4.3 billion cumulative TV subscribers
in 180+ countries
- #1 share of broadcast and cable viewing across all key
demographics in the U.S.
- First-choice distribution and advertising partner with
industry-leading reach and capabilities
- Delivers financial benefits that will position the combined
company to create significant value for all shareholders
- Increased financial scale for significant and sustained
investment in programming and innovation
- Attractive growth outlook
- EPS accretive transaction with estimated run-rate annual
synergies of $500 million
- Highly cash flow generative
- Committed to maintaining an investment-grade credit rating and
modest dividend payment
- Bob Bakish to lead the combined company as President and CEO;
Joe Ianniello will serve as Chairman and CEO, CBS
CBS Corp. (NYSE: CBS.A, CBS) and Viacom (NASDAQ: VIA, VIAB), two
of the world’s leading entertainment companies, today announced
they have entered into a definitive agreement to combine in an
all-stock merger, creating a combined company with more than $28
billion in revenue.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20190813005648/en/
(Source: ViacomCBS Inc.)
The combined company, ViacomCBS Inc., will be a leading 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. The combined company will be
a scale player globally, with leadership positions in markets
across the U.S., Europe, Latin America and Asia. This includes the
largest television business in the U.S., with the highest share of
broadcast and cable viewing across all key audience demographics,
and strength in every key category, including News, Sports, General
Entertainment, Pop Culture, Comedy, Music and Kids – making it a
first-choice partner to distributors and advertisers. In addition,
the combined company will possess a portfolio of fast-growing
direct-to-consumer platforms, including both subscription and
ad-supported offerings. It will also include a major Hollywood film
studio, Paramount Pictures, which has been a producer and global
distributor of filmed entertainment for more than a century and
continues to be a global box office driver. Taken together, these
distinct strengths will accelerate CBS and Viacom’s ability to
deliver an array of compelling content to important and diverse
audiences across both traditional and emerging platforms around the
world.
Bob Bakish, President and Chief Executive Officer, Viacom, will
become President and Chief Executive Officer of the combined
company. Bakish said: “Today marks an important day for CBS and
Viacom, as we unite our complementary assets and capabilities and
become one of only a few companies with the breadth and depth of
content and reach to shape the future of our industry. Our unique
ability to produce premium and popular content for global audiences
at scale – for our own platforms and for our partners around the
world – will enable us to maximize our business for today, while
positioning us to lead for years to come. As we look to the future,
I couldn’t be more excited about the opportunities ahead for the
combined company and all of our stakeholders – including consumers,
the creative community, commercial partners, employees and, of
course, our shareholders.”
Joe Ianniello, President and Acting Chief Executive Officer,
CBS, will become Chairman and CEO of CBS. Ianniello, who will
oversee all CBS-branded assets in his new role, said: “This merger
brings an exciting new set of opportunities to both companies. At
CBS, we have outstanding momentum right now – creatively and
operationally – and Viacom’s portfolio will help accelerate that
progress. I look forward to all we will do together as we build on
our ongoing success. And personally, I am pleased to remain focused
on CBS’s top priority – continuing our transformation into a
global, multiplatform, premium content company.”
Shari Redstone, Vice Chair of the Boards of Directors, CBS and
Viacom, said: “I am really excited to see these two great companies
come together so that they can realize the incredible power of
their combined assets. My father once said ‘content is king,’ and
never has that been more true than today. Through CBS and Viacom’s
shared passion for premium content and innovation, we will
establish a world-class, multiplatform media organization that is
well-positioned for growth in a rapidly transforming industry. Led
by a talented leadership team that is excited by the future,
ViacomCBS’s success will be underpinned by a commitment to strong
values and a culture that empowers our exceptional people at all
levels of the organization.”
Strategic Rationale
- Premium content at scale. The combined company will
possess a portfolio of powerful consumer brands, including CBS,
Showtime, Nickelodeon, MTV, BET, Comedy Central and Paramount
Network, as well as one of the largest libraries of iconic
intellectual property, spanning every key genre and addressing
consumers of all ages and demographics. This library comprises
140,000+ TV episodes and 3,600+ film titles, and reunites
fan-favorite franchises such as Star Trek and Mission: Impossible.
The combined company will also have more than 750 series currently
ordered to or in production. In addition, it will include a major
Hollywood film studio, Paramount Pictures, which creates and
distributes feature-length entertainment around the world. The
combined company will also be one of the largest content spenders,
with more than $13 billion spent in the last 12 months.
- Global leadership positions. The combined company will
be a broadcast and cable leader in key markets around the world,
reaching more than 4.3 billion cumulative TV subscribers. In the
U.S., the combined company’s portfolio of broadcast, premium and
cable networks will have the highest share of viewing on television
among key audiences, including Kids, African Americans and Hispanic
viewers. In addition, the combined company will operate strong
broadcast networks in the UK, Argentina and Australia, as well as
pay-TV networks across more than 180 countries. It will also have
significant global production capabilities across five continents –
creating content in 45 languages.
- Powerful, three-part strategy for growth. In a quickly
evolving media landscape, the combined company will benefit from
its distinct competitive position as one of the most important
global content providers – for its own platforms as well as for
third parties. This will enable the combined company to accelerate
the growth of its direct-to-consumer strategy, enhance distribution
and advertising opportunities and create a leading producer and
licensor of premium content to third-party platforms globally.
1.
Accelerate direct-to-consumer
strategy. Together, the combined company will be
positioned to accelerate and expand its direct-to-consumer strategy
through its proven and diverse portfolio of both subscription and
ad-supported offerings. These include CBS All Access and Showtime,
which deliver premium, branded content live and on demand to
millions of subscribers; Pluto TV, the leading free streaming TV
service in the U.S.; and niche products such as CBSN, ET Live and
Noggin. It also has an opportunity to expand globally by leveraging
its existing strength in both subscription and ad-supported
offerings, combined library, content production capabilities and
international infrastructure.
2.
Enhance distribution and advertising
opportunities. The breadth and depth of the
combined company’s reach across both traditional and new platforms
– including 22% of U.S. TV viewership – will drive important new
distribution and advertising opportunities. For distributors, this
includes forming more expansive and multifaceted relationships, and
applying the benefit of retransmission consent across a combined
portfolio. For advertisers and agencies, the combined company will
provide industry-leading reach through a variety of formats,
including a portfolio of differentiated advanced advertising and
marketing solutions, such as CBS Interactive, Viacom Vantage and
Viacom Velocity, which will be applied against significant,
expanded inventory across the portfolio.
3.
Create a leading producer and licensor of
premium content to third-party platforms globally. As one of
the biggest premium content providers in the world, the combined
company is positioned to deliver content to a diverse global
customer base that includes MVPDs, broadcast and cable networks,
subscription and ad-supported streaming services, mobile providers
and social platforms. Notably, in addition to content licensing,
CBS and Viacom are developing must-watch programming for a broad
range of third-party networks and platforms to feed significant
demand for original, premium content.
- Significant value for all shareholders. The combined
company will have an attractive growth outlook and increased
financial scale with substantial free cash flow, which will enable
significant and sustained investment in programming and innovation,
as well as support the combined company’s commitment to maintaining
a modest dividend payment. The transaction will be EPS accretive
and is expected to deliver an estimated $500 million in annualized
run-rate synergies within 12-24 months following closing, with
additional strategic benefits. With one of the strongest balance
sheets in the industry, the combined company will benefit from a
solid investment grade rating.
Leadership, Governance and Transaction Terms
In addition to Bakish and Ianniello, the leadership team of the
combined company will include Christina Spade as EVP and Chief
Financial Officer; and Christa D’Alimonte as EVP, General Counsel
and Secretary.
The Board of Directors will consist of 13 members: six
independent members from CBS, four independent members from Viacom,
the President and CEO of ViacomCBS and two National Amusements,
Inc. (NAI) designees. Shari Redstone will be appointed Chair.
The merger agreement was approved by the Boards of Directors of
both CBS and Viacom by unanimous vote of those present, upon the
unanimous recommendations of the Special Committees of the CBS and
Viacom Boards of Directors, respectively. Existing CBS shareholders
will own approximately 61% of the combined company and existing
Viacom shareholders will own approximately 39% of the combined
company on a fully diluted basis. Under the terms of the merger
agreement, each Viacom Class A voting share and Viacom Class B
non-voting share will convert into 0.59625 of a Class A voting
share and Class B non-voting share of CBS, respectively.
NAI, which holds approximately 78.9% and 79.8% of the Class A
voting shares of CBS and Viacom, respectively, has agreed to
deliver consents sufficient to assure approval of the transaction.
More than two-thirds of the CBS directors unaffiliated with NAI
(and all of those unaffiliated directors who voted on the
transaction) have approved the transaction, as required in order to
permit NAI to consent to the transaction under the terms of the
2018 settlement agreement entered into among CBS, NAI and certain
other parties thereto.
The transaction is subject to regulatory approvals and other
customary closing conditions. It is expected to close by the 2019
calendar year end.
The Special Committee of CBS’s Board of Directors is being
advised by Centerview Partners LLC and Lazard Frères & Co. LLC
as its financial advisors and by Paul, Weiss, Rifkind, Wharton
& Garrison LLP as its legal counsel. The Special Committee of
Viacom’s Board of Directors is being advised by LionTree Advisors
LLC and Morgan Stanley & Co. LLC as its financial advisors and
by Cravath, Swaine & Moore LLP as its legal counsel. Viacom is
being advised by Shearman & Sterling LLP. NAI is being advised
by Evercore as its financial advisor and by Cleary Gottlieb Steen
& Hamilton LLP as its legal counsel.
Investor Call Details
CBS and Viacom will host a conference call with investors at
4:30 p.m. (ET) on August 13, 2019 to discuss this announcement.
A live audio webcast of the call will be available on the
Investors homepage of CBS’s website (investors.cbscorporation.com)
and Viacom’s website (ir.viacom.com). The conference call can also
be accessed by dialing 1 (877) 451-6152 (domestic) or 1 (201)
389-0879 (international). Please call five minutes in advance to
ensure you are connected prior to the call.
An audio replay of the call will be available beginning at 7:30
p.m. (ET) on August 13, 2019 in the Investor Calendar section of
CBS’s corporate website and in the Events, Webcasts & Annual
Meetings section of Viacom’s Investors home page, and at 1 (844)
512-2921 (domestic) and 1 (412) 317-6671 (international) using PIN
number 13693788.
The announcement press release and other information related to
the announcement will be accessible on CBS and Viacom’s
websites.
About CBS
CBS Corporation (NYSE: CBS.A and CBS) is a mass media company
that creates and distributes industry-leading content across a
variety of platforms to audiences around the world. The Company has
businesses with origins that date back to the dawn of the
broadcasting age as well as new ventures that operate on the
leading edge of media. CBS owns the most-watched television network
in the U.S. and one of the world’s largest libraries of
entertainment content, making its brand –"the Eye” – one of the
most-recognized in business. The Company’s operations span
virtually every field of media and entertainment, including cable,
publishing, local TV, film and interactive. CBS’ businesses include
CBS Television Network, The CW (a joint venture between CBS
Corporation and Warner Bros. Entertainment), Network 10 Australia,
CBS Television Studios, CBS Global Distribution Group, CBS Consumer
Products, CBS Home Entertainment, CBS Interactive, CBS All Access,
the Company’s direct-to-consumer digital streaming subscription
service, CBS Sports Network, CBS Films, Showtime Networks, Pop,
Smithsonian Networks, Simon & Schuster, CBS Television Stations
and CBS Experiences. For more information, go to
http://www.cbscorporation.com.
About Viacom
Viacom creates entertainment experiences that drive conversation
and culture around the world. Through television, film, digital
media, live events, merchandise and solutions, its brands connect
with diverse, young and young at heart audiences in more than 180
countries.
For more information on Viacom and its businesses, visit
http://www.Viacom.com. Keep up with Viacom news by following it on
Twitter (twitter.com/Viacom), Facebook (facebook.com/Viacom) and
LinkedIn (linkedin.com/company/Viacom).
Important Information About the
Transaction and Where To Find It
In connection with the proposed transaction, CBS and Viacom will
file with the Securities and Exchange Commission (“SEC”) a
registration statement on Form S-4 that will include a joint
consent solicitation statement of CBS and Viacom and that will also
constitute a prospectus of CBS. CBS and Viacom may also file other
documents with the SEC regarding the proposed transaction. This
document is not a substitute for the joint consent solicitation
statement/prospectus or registration statement or any other
document which CBS or Viacom may file with the SEC. INVESTORS AND
SECURITY HOLDERS OF CBS AND VIACOM ARE URGED TO READ THE
REGISTRATION STATEMENT, WHICH WILL INCLUDE THE JOINT CONSENT
SOLICITATION STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS
THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the
registration statement on Form S-4 (when available), which will
include the joint consent solicitation statement/prospectus, and
other documents filed with the SEC by CBS and Viacom through the
website maintained by the SEC at www.sec.gov or by contacting the investor
relations department of CBS (+1-212-975-4321 or +1-877-227-0787;
investorrelations@CBS.com) or Viacom (+1-212-846-6700 or
+1-800-516-4399; investor.relations@Viacom.com).
Participants in the
Solicitation
CBS and Viacom and their respective directors and executive
officers may be deemed to be participants in the solicitation of
consents in respect of the proposed transaction. Information
regarding CBS’ directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is contained in CBS’ Form 10-K for the fiscal year ended
December 31, 2018 and its proxy statement filed on April 12, 2019,
both of which are filed with the SEC. Information regarding
Viacom’s directors and executive officers, including a description
of their direct interests, by security holdings or otherwise, is
contained in Viacom’s Form 10-K for the fiscal year ended September
30, 2018 and its proxy statement filed on January 25, 2019, both of
which are filed with the SEC. A more complete description and
information regarding directors and executive officers will be
included in the registration statement on Form S-4 or other
documents filed with the SEC when they become available. These
documents (when available) may be obtained free of charge from the
SEC’s website at www.sec.gov.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and does not constitute an offer to subscribe for, buy
or sell, or the solicitation of an offer to subscribe for, buy or
sell, or an invitation to subscribe for, buy or sell any securities
or a solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in which such offer, invitation, sale or solicitation
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Cautionary Notes on Forward-Looking
Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as “expect,” “anticipate,” “intend,” “plan,”
“believe,” “seek,” “see,” “will,” “would,” “may,” “target,” similar
expressions and variations or negatives of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. These and other forward-looking statements are
not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements, including the failure to consummate the proposed
transaction or to make any filing or take other action required to
consummate such transaction in a timely matter or at all. Important
risk factors that may cause such a difference include, but are not
limited to: (i) the proposed transaction may not be completed on
anticipated terms and timing, (ii) a condition to closing of the
transaction may not be satisfied, including obtaining regulatory
approvals, (iii) the anticipated tax treatment of the transaction
may not be obtained, (iv) the potential impact of unforeseen
liabilities, future capital expenditures, revenues, costs,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition and losses on the future prospects, business
and management strategies for the management, expansion and growth
of the combined business after the consummation of the
transactions, (v) potential litigation relating to the proposed
transaction that could be instituted against CBS, Viacom or their
respective directors, (vi) potential adverse reactions or changes
to business relationships resulting from the announcement or
completion of the transactions, (vii) any negative effects of the
announcement, pendency or consummation of the transactions on the
market price of CBS’ or Viacom’s common stock and on CBS’ or
Viacom’s operating results, (viii) risks associated with third
party contracts containing consent and/or other provisions that may
be triggered by the proposed transaction, (ix) the risks and costs
associated with the integration of, and the ability of CBS and
Viacom to integrate, the businesses successfully and to achieve
anticipated synergies, (x) the risk that disruptions from the
proposed transaction will harm CBS’ or Viacom’s business, including
current plans and operations, (xi) the ability of CBS or Viacom to
retain and hire key personnel and uncertainties arising from
leadership changes, (xii) legislative, regulatory and economic
developments, (xiii) the other risks described in CBS’ and Viacom’s
most recent annual reports on Form 10-K and quarterly reports on
Form 10-Q, and (xiv) management’s response to any of the
aforementioned factors.
These risks, as well as other risks associated with the proposed
transaction, will be more fully discussed in the joint consent
solicitation statement/prospectus that will be included in the
registration statement on Form S-4 that will be filed with the
SEC in connection with the proposed
transaction. While the list of factors presented here is, and the
list of factors to be presented in the registration statement on
Form S-4 are, considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on CBS’ or
Viacom’s consolidated financial condition, results of operations,
credit rating or liquidity. Neither CBS nor Viacom assumes any
obligation to publicly provide revisions or updates to any forward
looking statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190813005648/en/
Press:
CBS Dana McClintock, Executive Vice President, Chief
Communications Officer (212) 975-1077 dlmcclintock@cbs.com
Kelli Raftery, Executive Vice President, Corporate
Communications (212) 975-3161 kelli.raftery@cbs.com
Viacom Justin Dini, Senior Vice President, Corporate
Communications (212) 846-2724 justin.dini@viacom.com
Investors:
CBS Anthony DiClemente, Executive Vice President,
Investor Relations (212) 975-2160 anthony.diclemente@cbs.com
Viacom James Bombassei, Senior Vice President, Investor
Relations and Treasurer (212) 258-6377
james.bombassei@viacom.com
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