DURBAN – CBS Corp and Viacom Inc have reached an agreement in principle, sources familiar with the matter told Reuters on Tuesday, taking one step closer to reuniting media mogul Sumner Redstone’s US entertainment empire after 13 years apart.
Viacom shareholders will receive 0.59625 CBS shares for each share they own, representing a slight premium to Viacom’s closing price on Monday.
Shares of Viacom rose 2.3 percent to $29.19 and CBS shares rose 2.4 percent to $49.20 in morning trading.
The two companies are controlled by National Amusements Inc, the holding company owned by billionaire Sumner Redstone and his daughter, Shari.
The deal represents a victory for Shari Redstone, president of National Amusement, after three attempts since 2016. Previous merger talks had failed because of clashes between executives over divvying up top jobs and the companies’ relative valuation.
The recombination comes amid an increasingly competitive media landscape dominated by Walt Disney Co and Netflix Inc, prompting Redstone to pursue a merger.
Viacom Chief Executive Bob Bakish is expected to be named the Chief Executive of the combined company. Joe Ianniello, interim Chief Executive of CBS, is expected to be named Chairman and Chief Executive of CBS Networks, which will exclude the Showtime cable network and book publisher Simon & Schuster, a source familiar with the matter said on Monday.