Tuesday, September 7, 1999 Published at 16:37 GMT 17:37 UK
Business: The Company File
Media giants in $80bn merger
Viacom says the future is unlimited for the new company
US entertainment company Viacom is merging with television giant CBS, in the world's biggest media merger.
The new entertainment empire, to be called Viacom, is valued at $80bn and will rival big names such as Walt Disney.
Effectively Viacom is buying CBS, giving it a price tag of $36bn.
A joint statement from the two said the new group will be the world's leading company in the production, promotion and distribution of entertainment, news, sports and music.
After the merger was announced, shares in Viacom were up 2-1/2 at 47-13/16 and CBS was up 1-3/4 at 50-11/16.
CBS's most famous celebrity is TV host David Letterman.
New stock for shareholders
The deregulation has prompted further moves towards integration in the television industry.
Another set of rules, which prohibited television companies from owning their own production companies, was also repealed several years ago.
The new company will be headed by Sumner Redstone, who took over Viacom in 1987 and seven years later bought up Paramount and the Blockbuster Entertainment Group.
Redstone, 75, will remain chairman and chief executive of Viacom.
CBS president Mel Karmazin, 56, will be the company's president and chief operating officer. Some analysts consider Mr Karmazin to be the heir-apparent of the company, once Mr Redstone steps down.
The new group will compete on equal terms with other US television companies like ABC, part of the Walt Disney Company, NBC, which is owned by General Electric, and CNN, now part of Time Warner.
The deal, which is due to be completed early next year, will see CBS shareholders swap their shares for Viacom stock, valuing CBS at $48.89 a share.
Between them, the companies had revenues of about $21bn last year.
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