Media giants CBS and Viacom are set to merge in a media mega-deal.

The new company, which would include brands such as MTV, Paramount Pictures and Comedy Central will have $28 billion in revenue and the largest market share – 22% - of the television viewing audience in the U.S., according to both firms.

As per a BBC report, the move is a result of mounting competition dominated by Disney, Netflix and Amazon, amongst others. 

"Right now there's a major transition going on regarding the consumption of TV — people are moving away from the traditional bundle to direct-to-consumer, on-demand shows or combinations of both," said Neil Begley, an analyst at Moody's.

The merger between CBS and Viacom will put a newly enlarged company in the mix, CBS reports, with a combined market value of about $30 billion.

"The combined CBS-Viacom would have many positive attributes, from cost synergies to dramatically improved leverage with distributors for the Viacom networks," Moody's analysts wrote in a note. "It would also have greater combined scale of content production, diversity and distribution."

The merged company, which will be called ViacomCBS, would be controlled by National Amusements, the holding company owned by billionaire Sumner Redstone and his daughter, Shari.

Shari Redstone is the president of National Amusements and vice-chairwoman of both CBS and Viacom, and will be the chair of the ViacomCBS board.

"I am really excited to see these two great companies come together so that they can realise the incredible power of their combined assets," Shari Redstone said in a statement. 

“My father once said 'content is king' and never has that been more true than today. We will establish a world-class, multiplatform media organisation that is well-positioned for growth in a rapidly transforming industry." 

As part of the terms of the merger, Viacom shareholders would receive about a 0.6 share of CBS stock in exchange for 1 share of Viacom stock.

The CBS report adds that National Amusements would retain control of the combined ViacomCBS through its ownership of Class A voting shares, currently representing close to 80% of the shareholder votes at both companies.

The deal will be finalised by 31 December, pending regulatory approval.

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