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Spin-offs Case Study

Case Title:

The Viacom Inc. Split-up: Opportunities and Challenges

Publication Year : 2005

Authors: Blessy keerthi, Srinath Manda

Industry: Entertainment


Case Code: SPN0001

Teaching Note: Not Available

Structured Assignment: Not Available

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Viacom Inc., one of the world's largest media conglomerates, was built over the years through several acquisitions. One of the biggest acquisitions in the company's history was the acquisition of Columbia Broadcasting System (CBS) by Viacom in 1999. However, in mid-2005, the company decided to split up into two separate entities owing to the stagnating stock price that has been affecting the company since May 2000. Though the split-up of the conglomerate is offering potential benefits like enhanced value of the new entities, ability to acquire high growth assets and better investment opportunities for investors, it is also posing challenges like loss of market power and synergies achieved as a combined entity.

Pedagogical Objectives:

  • To highlight the growth and the split-up of Viacom
  • To discuss the viability of split-up as an option for growth for conglomerates

Keywords : Viacom Inc. (Viacom); Media movies and broadcasting services; Largest media conglomerate; Split-up and reversal of merger; Combined entity market power synergies; Tom Freston and Leslie Moonves; Columbia Broadcasting System (CBS); Restructuring / Turnaround Strategies Case Study; CBS Corporation and Viacom merger; MTV networks and Nickelodeon; Acquisitions takeovers and mergers; Comcast, NBS Corporation, Time Warner; Sumner Redstone; Media industry deconsolidation; Opportunities and challenges; Enhanced value for investors

Contents : 
About Viacom Inc
Viacom Split-up into Two Separate Entities
The Future of the Entities
The Viacom Break-up
Declining Stock Price of Viacom
List of Major Assets Owned by Viacom

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