Report: CBS-Viacom Merger Drama Centers On Leadership Of Combined Company

The on-again, off-again merger between CBS Corporation CBS and Viacom, Inc. VIAB is taking a dramatic turn that could alienate CBS CEO Les Moonves.

What Happened

Shari Redstone, daughter of media mogul Sumner Redstone, continues her push to combine CBS and Viacom into one company, Reuters reported early Wednesday morning. The Redstone family owns a controlling interest in both CBS and Viacom through the family business, National Amusements Inc. As such, a merger would be in theory possible to complete — with or without the blessing of the leadership of both companies.

If a merger were to occur, Moonves would likely demand that CBS Chief Operating Officer Joseph Ianniello assume the second-highest executive position at the company, according to Reuters. But Redstone wants Viacom CEO Bob Bakish to be the No. 2 executive at the merged company and ultimately succeed Moonves, according to Reuters' sources. 

Why It's Important

If CBS presents a new offer to Viacom, it will likely consist of an all-stock deal that undervalues Viacom, according to CNBC. At least one Wall Street analyst favors such a deal, but the ongoing uncertainty could create volatility in Viacom and CBS stock.

What's Next

Separately, CNBC reported Redstone could move to replace Moonves as CEO if the two companies fail to merge. Redstone is expected to replace members of the CBS board if a deal fails to materialize, according to the report. 

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