CBS Corporation and Viacom Inc. Announce Expected Closing Date of Merger

CBS Corporation and Viacom Inc. Announce Expected Closing Date of Merger

ViacomCBS Transaction Expected to Close on December 4 and

Trading of ViacomCBS on Nasdaq Expected to Begin December 5

NEW YORK — Nov. 25, 2019 — CBS Corporation (NYSE: CBS.A, CBS) and Viacom Inc. (Nasdaq: VIAB, VIA) today announced that their pending merger is currently expected to close after market hours on Wednesday, December 4th. Immediately following the closing, the combined company will be renamed “ViacomCBS Inc.” (“ViacomCBS”), and it is expected to begin trading on the Nasdaq Global Select Market (“Nasdaq”) on Thursday, December 5th under the new ticker symbols “VIACA” and “VIAC”.

As part of the listing, ViacomCBS will also become eligible for future inclusion in the Nasdaq 100 index.

Following the merger, with CBS continuing as the surviving company, CBS will delist its Class A and Class B common stock from the NYSE and will list the Class A and Class B common stock of the combined company, including the outstanding shares of CBS Class A and Class B common stock (which will remain outstanding shares of ViacomCBS), on the Nasdaq Global Select Market (“Nasdaq”). Trading of the Class A and Class B common stock of ViacomCBS on Nasdaq under the new ticker symbols “VIACA” and “VIAC,” respectively, is expected to commence on the trading day following the effective time of the merger. Until the merger and subsequent transfer of listing to Nasdaq are complete, the CBS Class A and Class B common stock will continue to trade on the NYSE under the ticker symbols “CBS.A” and “CBS,” respectively. The completion of the merger remains subject to customary closing conditions.

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 (Nasdaq: VIAB, VIA) 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 Pending Merger Between CBS and Viacom and Where To Find It

In connection with the pending merger between CBS Corporation (“CBS”) and Viacom Inc. (“Viacom”), CBS has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (No. 333‑234238) (the “Registration Statement”) that includes a joint consent solicitation statement of CBS and Viacom and that also constitutes a prospectus of CBS (the “joint consent solicitation statement / prospectus”). The Registration Statement was declared effective by the SEC on October 25, 2019. Viacom and CBS commenced mailing the definitive joint consent solicitation statement / prospectus to Viacom stockholders and CBS stockholders on or about October 28, 2019. This communication 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 INCLUDES 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 PENDING MERGER AND RELATED MATTERS. Investors and security holders may obtain free copies of the Registration Statement, which includes 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).

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 pending merger 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 pending merger 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 pending merger may not be completed on anticipated terms and timing, (ii) a condition to closing of the pending merger may not be satisfied, (iii) the anticipated tax treatment of the pending merger 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 pending merger, (v) litigation relating to the pending merger against CBS, Viacom or their respective directors, (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the pending merger, (vii) any negative effects of the announcement, pendency or consummation of the pending merger 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 pending merger, (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 pending merger 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 pending merger, are more fully discussed in the joint consent solicitation statement / prospectus included in the Registration Statement. While the list of factors presented here and the list of factors presented in the Registration Statement 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.

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From The Hollywood Reporter via Billboard:

Viacom, CBS Set Date to Close Merger

CBS Corp. and Viacom said they will close their recombination, creating ViacomCBS, after the market close Dec. 4. The combined company's stock will start trading Thursday, Dec. 5.

The companies this summer unveiled the latest entertainment industry mega-deal, which comes 14 years after Sumner Redstone split his entertainment empire in two with the idea of having two focused companies. The Redstone family will continue to control the combined firm.

Management previously said the merger would close in early December, with Shari Redstone recently saying it would be at the "very beginning" of the month.

Viacom CEO Bob Bakish will lead the merged ViacomCBS as president and CEO, while CBS Corp. acting chief Joe Ianniello will become chairman and CEO of the CBS branded assets. CBS CFO Christina Spade will serve as CFO of the merged firm, and Shari Redstone, vice chair of both companies, will serve as chair of the combined entity.

ViacomCBS will own the Paramount Pictures studio, the CBS broadcast network, such cable network brands as MTV, BET, Nickelodeon, Comedy Central and the Paramount Network, as well as such streaming services as CBS All Access, Showtime OTT and Pluto TV. It will have a library of 3,600 film titles and 140,000 TV episodes.

ViacomCBS will also boast a 22 percent share of the U.S. television audience, larger than Comcast, Disney, Fox Corp., Discovery or WarnerMedia.

The stocks of both Viacom and CBS have been trading lower since the merger was first announced as analysts and investors have questioned how much the merged company can thrive beyond the initial phase of cost reductions. "The skepticism is very motivating," Shari Redstone recently said. "We need to prove to the market that we can execute on what our strategy is."

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From Reuters:

CBS ordered to disclose internal records on Viacom deal

(Reuters) - A Delaware judge on Monday ordered broadcaster CBS Corp to turn over records regarding its plan to reunite with Viacom Inc to a shareholder who wants to investigate if the deal unfairly benefits Shari Redstone, who controls both companies.

The deal is scheduled to close on Dec. 4, combining CBS television network, CBS News, Showtime cable networks with MTV Networks, Nickelodeon, Comedy Central and the Paramount movie studios.

The judge, Joseph Slights of Delaware’s Court of Chancery, ordered CBS to turn over materials the CBS board discussed when considering the merger with Viacom, which was split from CBS 13 years ago.

The company was also ordered to provide documents regarding the nomination and appointment of board members to the special committee that approved the merger earlier this year, as well as some communications between Redstone and the board.

CBS declined to comment and Viacom did not immediately respond to a request for comment.

Shareholders were not given the opportunity to vote on the deal, which follows two recent failed attempts to merge the companies that are both controlled by National Amusements Inc, the holding company of Sumner Redstone and his daughter Shari.

Larry Hamermesh, a professor at Delaware Law School in Wilmington, said the shareholder is likely to seek damages after the merger closes, rather than trying to block a deal that is closing soon.

Also on Monday, a Viacom shareholder, Louis Wilen, filed a proposed class action lawsuit against the board of Viacom in the same court. The complaint was filed under seal and no details beyond the parties’ names were disclosed.

Shari Redstone’s 2018 proposed merger with Viacom was rejected by the CBS board, a battle that pitted her against Les Moonves, who said the deal was harmful to CBS shareholders.

Moonves was ousted as chief executive officer in September 2018, and National Amusements settled the litigation with an agreement not to seek a merger of the companies for at least two years.

Slights also ordered records from the earlier merger attempts to be turned over to the shareholder, Bucks County Employees Retirement Fund.

Slights found evidence that the deal may bail out Redstone’s stake in Viacom and that Redstone may have violated the 2018 agreement.

Slights did reject some of the requests for information. The judge declined to order the production of documents to determine the independence of CBS directors and refused to order CBS to turn over expert reports from the litigation over the proposed 2018 merger.

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From Wellston Journal:

CBS-Viacom merger leads to big payouts for top execs

The merger of Viacom and CBS is shaping up to be lucrative for its top two execs.

Acting CBS Chief Executive Joe Ianniello, who will be chairman and CEO of CBS at the combined firm, will bank a hefty payout of $70 million when the deal closes. That payout is tied to a provision in his old CBS contract that entitled him to a lump sum if he wasn’t named CEO of ViacomCBS.

Viacom CEO Bob Bakish, who will grab the reins as president and CEO of the combined ViacomCBS, will see his total compensation jump 55 percent to about $31 million a year, according to an SEC filing.

Last week, Viacom and CBS, to reunite under National Amusements, the holding company of the incapacitated media mogul Sumner Redstone. The $27 billion deal brings together Viacom’s cable channels Nickelodeon, MTV, Comedy Central and movie studio Paramount Pictures, with CBS’ broadcast network and cable channel Showtime.

The deal is expected to close by year’s end. As reported by The Post, it could close within the next three months, given that National Amusements Inc., which owns an 80% stake in both companies, has the power to fast-track the deal’s closing if it doesn’t meet regulatory opposition.

Bakish, whose new contract ends four years after the deal closes, will see his salary rise 3% to $3.1 million,

The CEO is eligible for a $12.4 million bonus, up 77%, as well as a $16 million incentive package, up about 60%.

Bakish will also nab a one-time stock grant of ViacomCBS shares worth $5 million.

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From the Los Angeles Times:

Viacom and CBS reunite in $12 billion deal, but challenges abound

Shari Redstone, who helped engineer the merger, becomes the first chairwoman in Viacom’s history.(Evan Agostini / Invision/AP)

Long known as the squabbling siblings of media, CBS Corp. and Viacom Inc. are poised to finally reunite after 13 years apart.

The much-anticipated corporate union, which will be called ViacomCBS Inc., is set to conclude Wednesday after the markets close. The Viacom name gets top billing even though CBS is more valuable.

The merger culminates a three-year campaign by Shari Redstone — daughter of the ailing mogul Sumner Redstone — who out-maneuvered her father’s long-time lieutenants to merge the New York-based media companies.

“This merger was born out of necessity,” said Peter Csathy, chairman of CREATV, an Orange County advisory firm. “It is no mystery that scale is what everyone has been looking for in this fundamentally changing media space.”

Shares in the reconstituted company, which will be valued at about $25 billion, will begin trading Thursday on the Nasdaq market under ticker symbols, VIAC and VIACA.

The all-stock transaction is worth nearly $12 billion, which was the market capitalization of Viacom, the media company that owns MTV, Comedy Central, Nickelodeon, BET and Paramount Pictures, the movie studio known for “Top Gun” and the “Transformers” franchises.

CBS and Viacom stock have each dropped about 20% since the merger was announced in August. CBS closed Tuesday down 1.3%, or 52 cents, to $39.34. Viacom closed down 1.22%, or 29 cents, to $23.47.

Investors are concerned that ViacomCBS has too much exposure in traditional businesses, including TV advertising and cable channels, which have been pummeled by cord-cutting. While CBS has moved into streaming, its offerings have been less ambitious than those launched by rivals.

The merger is latest in the wave of media consolidations. Last year, telecommunications colossus AT&T acquired HBO, CNN, TBS and the Warner Bros. studio in an $85-billion deal. In March, Disney completed a $71.3-billion acquisition of much of Rupert Murdoch’s Hollywood holdings, including 20th Century Fox film and television studios.

CBS and Viacom suddenly found themselves medium-sized players. Both were weakened by years of boardroom battles, costly lawsuits, and management woes.

The company must quickly bring together two starkly different corporate cultures and increase revenue to retain such expensive properties as CBS’ partnership with the NFL. Corporate leaders also must decide whether to push more aggressively into streaming or become a larger content supplier to Netflix and others.

“The company’s digital strategy is trying to strike a tricky balance between licensing revenues, growing its own streaming services and not cannibalizing its legacy revenue,” Barclays Capital media analyst Kannan Venkateshwar wrote in a recent report.

Viacom made its debut as a public company in 1971 when it was spun off from CBS after the Federal Communications Commission ruled that the three television networks could not syndicate their own programming.

The two companies merged in 2000, but six years later, Sumner Redstone separated them again, amid fears that CBS would drag down Viacom, which then was the faster growing company. But within a decade, roles had reversed and it was venerable CBS that had more clout.

Viacom Chief Executive Bob Bakish becomes president and chief executive of the new entity, and he will have a seat on the board.

Shari Redstone becomes the first chairwoman in Viacom’s history.

CBS’ acting CEO, Joseph Ianiello is in line to collect $100 million in severance, including $79 million cash, at the deal’s close. Ianniello received a new 15-month contract, entitling him to tens of millions of dollars more.

Shari Redstone first attempted to facilitate the merger in 2016, but retreated. She tried again in 2018 but was rebuffed by then-CBS chief Leslie Moonves. He was forced out a year ago amid a sexual harassment scandal and the boards of two companies eventually concluded they needed to bulk up.

Though it will be smaller than its rivals — Disney’s market value is $268 billion — ViacomCBS will be one the largest players in TV advertising, capturing an estimated 20% of viewership to traditional television outlets. It also will spend more than $13 billion a year to produce content with plans to increase its profile in video streaming space with CBS All Access, digital news channel CBSN, Showtime and Pluto TV.

The company’s library is stocked with more than 140,000 television episodes, including lucrative children’s franchises including “SpongeBob SquarePants,” and more than 3,600 movie titles.

It will also have international exposure with networks in Britain, Australia and Argentina. CBS’ premium channel, Showtime, once again will have access to movies from Paramount Pictures’ deep library.

The merger was approved by the Redstone family and ratified by the boards of both companies.

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From The Hollywood Reporter:

Does ViacomCBS Need to Slim Down to Scale Up?

Mogul Shari Redstone must convince Wall Street that ViacomCBS' sprawling set of assets will deliver the profits needed to keep pace with entertainment giants.

As the two companies prepare to recombine, some Wall Street skeptics hope the mogul will sell "non-core" assets (like book publishing, real estate or even a TV channel) to better position the firm for investors.
After Jeff Bewkes was made CEO of Time Warner in 2007, he sold off AOL, Time Warner Cable and even corporate namesake Time Inc. to focus the firm's energies on the creation and distribution of film and TV content (and aggressively position it for an eventual sale to AT&T). Rupert Murdoch, for decades an acquirer, sold most of 21st Century Fox to Disney this year for $71.3 billion to concentrate on live sports and news with Fox Corp.

Now, as ViacomCBS officially forms (expected on Dec. 4), Wall Street analysts and insiders are predicting that controlling shareholder Shari Redstone, CEO Bob Bakish and president and acting CBS CEO Joseph Ianniello are pondering a similar strategy — call it slimming down to scale up.

To be sure, investors are clamoring for something of significance, given shares of both CBS and Viacom have sunk steadily, wiping roughly $10 billion off the combined firm's market cap since they revealed Aug. 13 that they would merge. Bakish's pronouncement of a minimum $500 million in cost synergies within two years just isn't cutting it.

Indeed, there are assets that stick out as divestiture possibilities, such as book publisher Simon & Schuster and Watch! magazine. At CBS, where Simon & Schuster resides, overall revenue rose 6 percent in 2018 to $14.5 billion, but its publishing segment saw a slight decline to $825 million.

"It wouldn't perhaps be far-fetched to think of the book publishing business as a non-core asset for potential divestiture for ViacomCBS," says CFRA Research analyst Tuna Amobi, noting that the division "has recently been a drag on CBS' overall results while also unlikely to play a meaningful strategic role in the direct-to-consumer transition for the combined company."

Beyond narrowing its focus to growth areas with potential — such as selling content to D-to-C streaming platforms like Netflix and investing in its own services, like CBS All Access — the company could use proceeds of asset sales to pay down its $17.4 billion debt. Divesting for a more narrow focus was already a strategy employed by former CBS CEO Leslie Moonves, who shed the billboard business in 2013 and radio three years later.

Just before he was forced out in September 2018, Moonves even sold CBS Television City in Los Angeles to Hackman Capital Partners for $750 million, and a source tells The Hollywood Reporter that the merged ViacomCBS will review its real estate portfolio, looking to cash in on a strong market. CBS, for example, considered selling its "Black Rock" skyscraper in Midtown Manhattan for $370 million in 2000, though it could fetch four times that today, based on square-foot averages.

Even Paramount Pictures was in play in 2016, but Viacom couldn't find a suitable buyer willing to pony up at least $10 billion for a hefty stake in the century-old movie studio. Now that CBS All Access, Showtime OTT and Pluto TV are in need of premium content, a sale of Paramount is unlikely, though some on Wall Street wouldn't mind if ViacomCBS sold off some slow-moving cable channels, such as MTV and VH1, even though they've seen some upticks in Nielsen ratings lately.

While Viacom has suggested that revenue synergies could eventually swell to $1.2 billion for the combined firm, Bernstein analyst Todd Juenger stated in a recent report, "We don't believe in the theory," further indicating a need to jettison underperforming assets. This fall, some analysts reduced their near-term growth prospects for ViacomCBS after a regulatory filing indicated that cash flow could fall below expectations amid the merged company's plans to spend at least $13 billion creating content annually for its various platforms.

"The company's management (and the new board) should move quickly to help erase the stench of this deal process by selling non-core assets and aggressively cutting costs," says MoffettNathanson analyst Michael Nathanson. Gimme Credit analyst Dave Novosel echoes, "Speculation is that the combined company may seek to sell non-core assets to reduce leverage."

Wall Street watchers have predicted savings will come from such corporate functions as legal, finance, human resources, government relations, communications and technology operations, so employees in those functions are at risk of losing their jobs. At stake are as many as 2,000 jobs, or 9 percent of the ViacomCBS total. Bakish has emphasized that the savings target would not include production and marketing costs amid intense competition for premium content in the streaming era.

On a November earnings conference call, Bakish laid out four key areas of revenue synergy opportunities: distribution, advertising, content licensing and streaming, and he touted a library of 140,000 TV episodes and 3,600 films. "This level of volume is sufficient to supply both our needs and third parties," he said.

And if ViacomCBS sells assets that don't fit with Bakish's four-pronged attack, it could then go on a buying spree. "We will continue to look at opportunities in the marketplace," Bakish said shortly after the deal was announced. Bankers and analysts speculate that the likes of Lionsgate/Starz and Discovery are future merger partners for ViacomCBS, or it will simply continue to purchase content franchises, as Viacom did in August with a deal for the Garfield property.

After all, Credit Suisse analyst Douglas Mitchelson opined in a report earlier this year: "Even a merged CBS-Viacom is still arguably quite sub-scale compared to the other streaming players."

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Originally published: Monday, November 25, 2019.

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