Two hugely popular and expansive media companies CBS and Viacom are on their way to a substantially largest merger in the media industry. There have been speculations about the Viacom CBS merger for a very long time; however, now it is expected that the two would announce the merger soon.
Viacom CBS merger: What it means?
Both the companies have been chalking out their terms for a huge all-stock merger which would be about a total of $30 billion. The deal of Viacom CBS merger is going to be done on various terms pertaining to the valuation of Viacom at the current level.
People and experts across the globe are discussing the Viacom CBS merger. Here are a few important points people are talking about:
1] Drop-in shares prices
The first report from the Wall Street Journal has shown terms of the Viacom CBS merger after which the shares of Viacom dropped by 4.9 percent to 28.53 dollars. This is seen as one of steepest decline in a day in almost five months. The shares of CBS also dropped to 48.04 percent which is again a 1.8 percent decrease.
2] Merger discussions in marathon style
The merger was discussed in a long and detailed session that was done in a marathon style. The trade ration between the companies is .59 as per the stock prices of the companies in NYSE.
3] The Merger of Highest watched Broadcasters
The investment vehicle National Amusements Inc headed by Shari Redstone controls both companies is said to become the chairman of the merged entity. Viacom chief executive officer Bakish would be the CEO according to sources. This Viacom CBS merger brings together the highest watched US broadcast network and the Paramount movie studio owners. MTV and Nickelodeon are part of this group.
4] Scale-Up for Better Stance in Third-Party Negotiations
This merger is looked up to bring them to higher scales and they are expected to have a stronger side when they negotiate with the certain third party companies.
5] Discussions going on for long
Over the last year, there have been discussions several times. Now the companies plan to save around 5000 million dollars in the annual Viacom.
6] Whopping 1 billion dollar savings
The code names “Venus and Comet” are being used for two sides and the companies expect around savings of 1 billion dollars combined
7] Shares show some positive trends in 2019
The shares of CBS have been volatile for several years now, however, there was an increase of 7% recorded in 2019. Viacom shares also rise 12 percent this year as the investors were able to identify turnaround efforts has by the CEO.
8] The big announcement of the Viacom CBS merger likely this week
Several sources having familiarity with the issue have revealed that an announcement of the merger is likely to be done by this week.
There are negotiations being done right now which would impact the time when the final resolution is reached and the official announcement is made. There has been no official news about the deadline yet.