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Media giants CBS (CBS) - Get CBS Corporation Class B Report and Viacom (VIAB) - Get Viacom Inc. Class B Report  agreed Tuesday to combine in a long-awaited an all-stock merger, creating a combined company with more than $28 billion in revenue and an approximately $30 billion market capitalization.

The two firms, which had been part of one company run by media mogul Sumner Redstone until 2006, will recombine as a new entity known as "ViacomCBS Inc." Viacom President and CEO Bob Bakish will become president and CEO of the combined company. Sumner Redstone's daughter Shari Redstone -- a well-regarded media executive in her own right -- will become the first chairwoman in Viacom's history. Joe Ianniello, president and acting CEO at CBS, will become chairman and CEO of CBS.

This is the third time in three years that CBS and Viacom attempted to merge. The companies estimate that the deal will save some $500 million in annualized costs within one to two years of the closing. The merger will combine Viacom properties such as MTV, Nickelodeon, Comedy Central and the Paramount film and TV studio with CBS's broadcast network and Showtime premium network.  

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(Source: CBS/Viacom)

Shares of CBS rose 1.4% to close at $48.70 on the news, while Viacom added 2.4% to $29.21. The Redstone family's National Amusements Inc., which controls nearly 80% of both companies' voting shares, is backing the merger.

Shari Redstone added in a statement that "I am really excited to see these two great companies come together so that they can realize the incredible power of their combined assets. My father once said 'content is king,' and never has that been more true than today."

"Today marks an important day for CBS and Viacom as we unite our complementary assets and capabilities and become one of only a few companies with the breadth and depth of content and reach to shape the future of our industry," Bakish said in a statement. "Our unique ability to produce premium and popular content for global audiences at scale -- for our own platforms and for our partners around the world -- will enable us to maximize our business for today while positioning us to lead for years to come."

Under terms of the deal, Viacom shareholders will receive 0.59625 shares of CBS stock for every Viacom share that they own. The transaction will give CBS holders 61% and Viacom investors 39% of the combined company.

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