-Bloomberg
Word has it that Shari Redstone, the de facto decision maker at CBS Corp. and Viacom Inc., is reexamining a merger of her ailing father's two media companies. Les Moonves, CBS's chief, is also reportedly coming around to the idea of taking the troubled Viacom media assets under his wing -- a plan he helped steer Redstone away from in late 2016. As I've been saying in recent weeks, it was only a matter of time before CBS-Viacom would be back on the table.
With 21st Century Fox Inc. selling most of its TV and film assets to Walt Disney Co. and others exploring deals, Redstone won't want to sit out the industry consolidation. The $66 billion Disney-Fox merger and AT&T Inc.'s $109 billion takeover of Time Warner Inc. still hinge on government approvals. But assuming those go through, along with Discovery Communications Inc.'s acquisition of Scripps Networks Interactive Inc., a subsequent deal between CBS and Viacom would reduce the top eight U.S. media companies down to five. That will transform the competitive landscape:
Whether the industry reconfiguration is enough for the traditional programmers to solidify their subscriber base in the age of Netflix Inc. and skinny streaming bundles is another story. Still, scale is their best hope, and if proven dealmakers Bob Iger and John Malone are doing it, then Redstone should take her cue.
Synergies would be easiest to identify between CBS and Viacom, given the shared ownership and similarities. Plus, if Redstone believes Viacom can still be fixed, then it's awfully cheap at these levels:
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