CBS and Viacom tap Bain to advise on merger integration
CBS and Viacom have brought in consulting firm Bain & Company to advise on the merger integration of the two media companies.
In August, CBS and Viacom announced an agreement to merge, with a closing date expected by the end of the year. The two media firms share the same controlling shareholder – National Amusements – which is the family holding company of Sumner Redstone and his daughter Shari. Viacom and CBS were previously under the same corporate tent from 2000 to 2006.
The decision to merge arrives amid a context of media consolidations (e.g. Disney buying Fox, Marvel, and Lucasfilm; AT&T buying Time Warner) and a lurch toward streaming services as the dominant means of media transmission.
The merger will bring together the CBS TV network, Showtime, MTV, Nickelodeon, and Paramount under one corporate roof. The new ViacomCBS will be a small player in the new media landscape, however, with a market capitalization of $30 billion compared to Disney’s $245 billion, Comcast’s $193 billion, and Netflix’s $136 billion.
The new group will be 61% owned by CBS shareholders and 39% owned by Viacom. Viacom CEO Bob Bakish will serve as CEO of the new entity, CBS acting chief Joe Ianniello will become chairman and CEO of CBS (overseeing CBS assets), CBS CFO Christina Spade will become CFO of the merged firm, and Shari Redstone, vice chair of both companies, will become chair of ViacomCBS.
An internal memo from Bakish outlined the creation of an Integration Management Office (IMO) to ensure the combined company can hit the ground running when the $30 billion, all-stock transaction closes. Bakish announced that the IMO would be led by Jose Tolosa, CTO of Viacom, and Gautam Ranji, EVP of strategic planning and development at CBS.
The memo also revealed that the company had hired strategy firm Bain & Company to advise on the integration process, describing the Boston-headquartered consultancy as “a firm with deep expertise in media and integrations.”
Founded in 1973, Bain delivers strategy, marketing, organization, operations, IT, and M&A consulting services to clients across a range of industries. The company has annual revenues of $4.5 billion, 58 offices across 37 countries, and more than 10,000 employees. Bain is one of the most prestigious management consulting firms, alongside rivals McKinsey & Company and Boston Consulting Group.
Earlier this month, Viacom and CBS announced the merged company’s dual-class share would trade on the Nasdaq (CBS shares were previously on the NYSE). Upon closure, ViacomCBS’ shares will trade under VIACA and VIAC, with National Amusement controlling the majority of VIACA (Class A) shares, and VIAC representing the common shares held by other investors.
