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Viacom Halts All Merger Talks With CBS

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Viacom announced that it is ending all talks of a merger between them and television network, CBS. The two companies originally split into separate entities back in 2006 and many hoped they would, once again, re-unite as Viacom continues to struggle across the board.

National Amusements, who controls 80% of the voting stock in both CBS and Viacom, wanted the talks to cease. National Amusements is a holding company owned by billionaire Sumner Redstone. Redstone, apparently, did not want a merger to take place. Long time Viacom exec Bob Bakish was recently named CEO of the company and that seemed to cause second thoughts about any merger.

Vice Chair of Viacom, Shari Redstone, said that, “I am very excited about the strategy Viacom is pursuing under Bob’s leadership, as well as the relentless hard work he has demonstrated not only in his fast start at the helm, but in his many years at the company. While there is much work to do, I firmly believe that Viacom has a bright future…”

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Viacom’s stock has plunged $2.25 per share on this news and the company’s challenges are mostly due to declining ad revenue, a huge decrease in viewership and much of its top talent leaving for greener pastures. Most of their programming is aimed toward younger audiences and the entire company has been struggling with trying to turn its fortunes around.

The proposed merger of the company was looked upon as trying to revive Viacom’s sagging perceived value. The new CEO, Bakish, has laid out a definitive plan for Viacom which includes trying to boost MTV’s almost non-existent ratings. The merger talks were reportedly stopped because CEO Les Moonves, of CBS, wanted a controlling share of the stock in the new company. Apparently, Redstone rejected that idea.

Shari Redstone went on to say that, “We know Viacom has tremendous assets that are currently undervalued, and we are confident that with this new strong management team, the value of these assets can be unleashed. At the same time, CBS continues to perform exceptionally well under Les Moonves and we have every reason to believe that momentum will continue on a stand-alone basis.”

Mr. Sawyer is a freelance writer, editor and journalist from Tampa. He has written thousands of articles for hundreds of magazines and news sites on countless topics including science, the media and technology. He is also the author of many white papers, special reports and ebooks covering a wide range of subjects.
Kevin Sawyer
Broadcast Beat - Production Industry Resource