Dec 3, 2019

Investors bearish as Viacom and CBS deal nears close

Expand chart
Data: Money.net; Chart: Andrew Witherspoon/Axios

The merger between Viacom and CBS is expected to close this week, but investors don't seem too excited about it. Shares from both companies have been down since the all-stock deal was formally announced in mid-August.

Why it matters: Analysts have expressed reservations about whether the combined company will be big enough to compete with the likes of Amazon and Netflix.

  • Last month, CBS was sued by an investor who argued the all-stock acquisition of Viacom is better for the company's majority shareholder Shari Redstone than other investors.

Yes, but: Viacom's business looks healthier than it has in a long time.

  • Last quarter, in its final as an independent company, Viacom's movie business Paramount reached full-year profitability for the first time since 2015, and its domestic TV business posted advertising growth for the first time in six years.

What they're saying: Redstone has argued that the new company, with a combined annual content investment of $13 billion, will be able to compete with the big tech giants in creating lots of good content.

  • Bob Bakish, the new CEO of the combined company, told CNBC's Jim Cramer Monday that neither he nor management are happy with the valuation of Viacom right now, but he believes that the marketplace will see the value of the combined company after the deal closes.

What's next: Layoffs are expected when companies of this size combine, particularly in redundant departments like personnel, sales or real estate.

Go deeper: CBS and Viacom agree to massive merger

Go deeper

Virginia governor announces removal of Richmond's Robert E. Lee statue

Photo: Andrew Lichtenstein/Corbis via Getty Images

Virginia Gov. Ralph Northam announced on Thursday that the state will remove the statue of Confederate Gen. Robert E. Lee from Richmond's historic Monument Avenue.

Why it matters: It's a watershed moment for Virginia, which has been at the center of a years-long national debate about whether Confederate monuments should be displayed publicly. That discussion reached a boiling point when protests about a statue of Lee in Charlottesville turned violent in 2017.

RNC expands convention search across the Sun Belt

Donald Trump, Mike Pence and their families on the last night of the Republican National Convention in Ohio in 2016. Photo: David Hume Kennerly/Getty Images.

The Republican National Committee is planning site visits over the next 10 days to more than a half-dozen cities — across the South and into Texas and Arizona — as it scrambles for a new convention host, people familiar with the internal discussions tell Axios.

Driving the news: The RNC's executive committee voted Wednesday night to allow most of the convention to move — with only a smaller, official portion remaining in Charlotte — after North Carolina's governor said the coronavirus pandemic would mean a scaled-back event with social distancing and face coverings.

Oil faces tough road back from coronavirus

Illustration: Aïda Amer/Axios

Oil companies in the battered shale patch are starting to bring back some production as prices climb, but a new report underscores how the pandemic is taking a heavy financial toll despite signs of revival.

Driving the news: Fourteen North American producers have filed for bankruptcy thus far during the second quarter, per a tally from the law firm Haynes and Boone, which closely tracks the sector's finances.