CBS, Viacom form committees to explore merger

CBS and Viacom have formed special committees to explore a merger, the companies said on Thursday, the first step in potentially reuniting the companies split by media mogul Sumner Redstone more than a decade ago.

The companies had previously explored a merger in 2016 at the urging of ailing 94-year-old Sumner Redstone and his daughter Shari, who control CBS and Viacom through privately held National Amusements Inc.

Those talks failed due to concerns by CBS’ directors and CBS chairman Les Moonves over governance issues and the deal’s financial sense for CBS shareholders.

But Shari Redstone has continued to discuss with executives at both companies her desire to merge the two, which intensified after Walt Disney Co. announced in December it would buy a majority of Twenty-First Century Fox Inc.’s assets, sources have said.

Moonves and Viacom CEO Bob Bakish held discussions in January about a potential deal. The boards of both companies decided on Thursday to begin a formal process to explore the deal through special committees.

The deal would pair CBS’ broadcast network, television studios and Showtime cable network with Viacom’s Paramount Pictures, Comedy Central, Nickelodeon and MTV.

That could help CBS’ streaming service compete with Netflix and boost the combined company’s leverage with cable and satellite distributors.