Shari Redstone got her wish.
After more than a decade apart, CBS and Viacom, both under her control, agreed to merge on Tuesday in a deal that will reunite a roster of once-mighty media businesses. Viacom’s Paramount film studio and MTV and Nickelodeon cable networks will be added to the broadcast giant CBS and the book publisher Simon & Schuster.
The combination of CBS and Viacom is a victory for Ms. Redstone, the leader of a family business that has led the two media giants for two decades. Their reunification (the two companies were once a single entity, called Viacom, until they were split up in 2006) was seen as necessary at a time when television audiences have eroded. Tech platforms like YouTube, Instagram and Netflix have chipped away at big media, eating into the once-fat profits that companies like CBS and Viacom reaped.
Ms. Redstone had pushed for a deal for at least three years but faced fierce opposition from CBS’s board, including its former chief executive, Leslie Moonves. Mr. Moonves was pushed out last September after several women accused him of sexual assault. He has denied the charges. Ms. Redstone will be chairwoman of the combined company.
“I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets,” she said in a statement. “We will establish a world-class, multiplatform media organization that is well-positioned for growth in a rapidly transforming industry.”
Viacom’s chief executive, Robert M. Bakish, will lead the combined company, which will be called ViacomCBS, and Joseph Ianniello, the CBS acting chief executive, will remain as head of a newly designated CBS unit, the boards of both businesses said in a statement.
When the two companies split in 2006, Viacom’s cable networks were seen as the faster-growing business and CBS the aging, out-of-step broadcaster. Fortunes reversed in the last decade as CBS became the most-watched television network and Viacom’s youth-centered channels were eviscerated by the internet.
The deal also represents the last in the current wave of mega media mergers. Two major transactions totaling more than $150 billion closed just last year. AT&T buttoned up its $80 billion acquisition of Time Warner. Shortly thereafter, the Walt Disney Company beat out its rival Comcast to win the majority of Rupert Murdoch’s 21st Century Fox business for $71.3 billion.
But the combination of CBS and Viacom is a fraction of those deals, underscoring the need for such a merger. Even Disney and AT&T may not be large enough to take on Netflix and YouTube.
The merger is what is known as a stock swap, and values Viacom at about $11 billion as of Monday’s closing market price. Under the swap, an investor with 1,000 shares of Viacom would receive 596.25 shares of CBS. CBS shareholders will in effect own about 60 percent of the combined business. The deal does not include any cash, making it a tax-free transaction. The ratio of shares is fixed for all Viacom investors, including those who own its voting stock.
The media industry’s decades-long success had been contingent on people continuing to pay for cable television, and customers have been cutting the cord for years. The inexorable shift toward digital entertainment has profoundly reshaped the industry’s economics. Netflix, for example, has a significant lead with more than 151 million subscribers around the world.
Still, it’s better late than never. “Like all good things, it was worth the wait,” Mr. Bakish said in a brief interview. “We’re really creating a global premium powerhouse,” he added, citing the benefit of combining Viacom’s ad-supported streaming service, known as Pluto, with CBS’s digital subscription product, All Access.
He listed a three-part strategy that includes selling more subscriptions, elevating digital advertising sales and creating original shows for other streaming platforms, including Netflix.
“Together, Viacom and CBS will become a significant player,” he said.
The deal is an important moment for Ms. Redstone, who has long waited in the shadow of her father, Sumner Redstone, the combative, cantankerous entrepreneur who over decades forged a media empire through a series of mergers bankrolled by big loans. He built a corporate empire only to dangle succession in front of his daughter, creating a caustic relationship that led to one of the most bitter family disputes in corporate America.
Ms. Redstone, who has been vacationing in Greece with her family, was not present during the negotiations, but her ascent in the business is sure to portend further deals for the company. She has started to weigh the possibility of snapping up other media businesses after the merger, several people familiar with her thinking have said. She has considered the few media companies remaining, including the cable network Starz, which has a budding international business, and Sony Entertainment, which has a large television production business.
This is a developing story and will be updated.