Viacom, CBS form exploratory committees to evaluate potential merger

Viacom Inc. and CBS Corp. announced separately Thursday that each of their Board of Directors has established a special committee of independent directors to evaluate a potential merger. In a statement, Viacom says there can be "no assurance" that this process will result in a transaction.

Why it matters: These talks come as more media companies are merging to better compete with tech giants, like Netflix and Amazon. Rumors of a Viacom-CBS merger intensified after Disney and Fox formally announced a merger deal in December.

The news comes the same day that CBS Corp.'s board was expected to discuss a merger with Viacom, per Axios' Dan Primack.

The holding company for CBS and Viacom, National Amusements, said it supports the process in a statement:

• “National Amusements supports the processes announced by CBS and Viacom to evaluate a combination of the two companies, which we believe has the potential to drive significant, long-term shareholder value.”

According to Viacom, the committee has retained independent legal counsel and independent financial advisors to evaluate the merger.

Viacom and CBS say that their committees and companies don't plan to comment further until the process is completed.

• The back story: The two companies have shared a complicated business relationship for years. After merging in 1999, Redstone's father, Sumner Redstone, split the companies in 2005. Both businesses have been managed independently ever since. Redstone made waves when she tried to bring the two companies together in late 2016, only to reverse her decision months later.
• A bright spot: The Wrap reported a few weeks ago that in a departure from previous talks, CBS CEO Les Moonves is now open to a possible deal.