Viacom announced that it is splitting into two separate publicly traded companies through a spin-off to shareholders in a decision that was approved by the company’s board of directors.
Current Viacom shareholders will continue to hold shares of both companies. The transaction is expected to be tax-free for them, and it should be completed before the first quarter of 2006.
Summer Redstone had this to say, “Today we celebrate our past successes by stepping forward to embrace the future. This transaction is the logical extension of the strategic vision that created Viacom and recognizes the inherent diversity of our assets as well as the changing business environment.”
Filling the newly created position of Non-Executive Vice Chairman of the board is Ms. Shari Redstone. She was named by Viacom’s board of directors, and has been a member of that board for 11 years.
Board member and former Verizon Vice Chairman and CFO Frederic V. Salerno will fill the newly created position of Lead Independent Director.
” We believe that this transaction will enable Viacom shareholders to fully benefit from the important gains we realized in building this Company by fully unlocking our significant untapped potential and creating new opportunities to build on our leadership positions, maximize earnings growth and fully exploit our considerable strengths,” said Mr. Redstone. “…The Board believes that the transaction will provide current and potential stockholders with attractive investment options that are more closely aligned with their various investment objectives.”
Mr. Redstone will chair a Special Committee formed by the board aimed to assist and monitor the process of creating the two companies. Board members Shari Redstone, Frederic Salerno and Philippe Dauman will also serve on the committee.
The new company created through the spin-off will retain the Viacom Inc. name and will be led by Tom Freston. The new Viacom will be comprised of MTV Networks (including MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT: Country Music Television, Spike TV, TV Land and many other networks around the world), BET, Paramount Pictures, Paramount Home Entertainment and Famous Music.
The other company, to be called CBS Corporation, will be led by Leslie Moonves and will combine the CBS and UPN broadcast networks, Viacom Television Stations Group, Infinity Broadcasting, Viacom Outdoor, the CBS, Paramount and King World television production operations, as well as Showtime, Simon & Schuster and Paramount Parks.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
