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Illustration: Sarah Grillo/Axios

CBS and Viacom reached a deal on Tuesday to merge into ViacomCBS Inc., reuniting the 2 companies 13 years after they split apart.

Why it matters: The deal will bring together Viacom's nearly two dozen cable channels with CBS' flagship broadcast network and its premium cable network, Showtime. The combined scale from the merger will help the new company broker stronger distribution deals with Pay-TV providers and allow it to better compete for audience attention and ad dollars.

Details: The all-stock merger creates a combined company with more than $28 billion in total revenue, according to ViacomCBS' press release.

  • Deal terms: The deal is expected to close by the end of the year. CBS shareholders will own approximately 61% of the combined company and existing Viacom shareholders will own approximately 39% on a fully diluted basis, per the release. Viacom shareholders will receive 0.59625 CBS shares for each of their shares. The deal values Viacom at $11.8 billion, which is slightly lower than its market capitalization as of Tuesday afternoon.
  • Leadership: As expected, Viacom CEO Bob Bakish has been appointed to run the new media behemoth, while acting CBS CEO Joe Ianniello will serve as chairman and CEO of CBS. Other top CBS executives will remain in their roles. CBS Chief Financial Officer Christina Spade will become EVP and chief financial officer of the company and Viacom Executive Vice President and General Counsel Christa D’Alimonte will become EVP, general counsel and secretary.
  • Board structure: As previously reported, the board of directors of the new company will consist of 13 members — 6 independent members from CBS, 4 independent members from Viacom, the President and CEO of ViacomCBS (Bob Bakish) and two National Amusements, Inc. (NAI) designees. Shari Redstone, the majority shareholder of both companies, will be appointed Chair.
  • Direction: The company plans to focus its growth efforts on direct-to-consumer products and producing and licensing content on third-party platforms. Its combined library will include more than 140,000 TV episodes and 3,600 movies.

The big picture: The companies have been dancing around a deal for the past 3 years, but drama over who would control the combined company has derailed progress. Now that longtime CBS CEO Les Moonves is out, Redstone finally had the leverage to push the deal over the finish line.

  • Redstone and National Amusements couldn't propose a deal for many more months, according to a 2018 settlement with CBS. However, the settlement didn't exclude the CBS or Viacom boards from proposing a merger themselves.

What's next: This deal could be the first part of a much bigger plan for Shari Redstone, the majority shareholder of both companies. Reports suggest that Redstone is looking to acquire other entities to give the combined company more scale.

  • Yes, but: A combined CBS-Viacom company would still be small compared to the entertainment giant created through the merger of Disney and most of Fox last year. It would also be much smaller than tech giants like Amazon and Netflix.

Go deeper

Scoop: Garland defends DOJ's handling of Jan. 6 probe

Attorney General Merrick Garland. Photo: Kevin Dietsch/Getty Images

Attorney General Merrick Garland will tell the House Judiciary Committee on Thursday that federal prosecutors "are doing exactly what they are expected to do" in seeking accountability for the "intolerable assault" on the Capitol on Jan. 6, Axios has learned.

Why it matters: Allies of former President Trump, including Republican congressmen, have criticized the department's treatment rioters charged with crimes, and sought to recast the insurrection as a righteous protest. Garland's testimony with be his first appearance before the panel.

Updated 43 mins ago - World

Police charge man with murder of British MP David Amess

Police outside Belfairs Methodist Church in Leigh-on-Sea, England, on Oct. 15. Photo: John Keeble/Getty Images

Police said Thursday that Ali Harbi Ali, a 25-year-old British man, has been charged with the murder of David Amess, a Conservative Party lawmaker in the U.K.

The big picture: Last week, the Metropolitan Police declared the fatal stabbing a terrorist incident, saying that they had found "a potential motivation linked to Islamist extremism."

48 mins ago - Health

Pfizer booster has 95.6% efficacy against COVID, large study shows

Photo: Scott Olson/Getty Images

A booster shot of the Pfizer-BioNTech vaccine is 95.6% effective against the coronavirus, compared with those who only had the first two initial doses, according to a large study released Thursday.

Why it matters: The study, which had more than 10,000 participants aged 16 and older, is the first controlled, randomized trial looking at boosters and their effectiveness, the companies said.