ViacOM, Inc. (CBS) announced Wednesday it will pay $12,500 a share for CBS All-Access for $19.8 billion in cash and stock.
Viacoms shares fell about 3.3 percent in premarket trading.
The deal was completed during a meeting in New York on Tuesday between Viacomm CEO Philippe Dauman and CBS chief executive Les Moonves.
Viacom, the largest TV and entertainment company in the U.S., owns CBS and Showtime, among other channels.
Moonves had told Dauman he would sell off a lot of CBS properties and the two sides worked out a deal that will allow Viacomo to pay for CBS for a shorter period of time.
Moonkes’ deal with CBS will expire after 2020.
The transaction will create the world’s third-largest pay-TV company after Disney and Time Warner.VIA Media Group, which owns the CBS broadcast network, said it would pay $4.4 billion in stock, which includes $4 billion from CBS, to be paid out over the next five years.
VIA Media’s board will also receive $4 million in stock.CBS said Viacomed will pay the cash, but it won’t receive any cash.
The company said the transaction will result in a net cash flow of $9.5 billion for the company.
Viasa, Viacamerica, which also owns CBS, CBS Interactive and other networks, said VIA will pay an additional $4,200 a share to cover the transaction.
Viament, Viasa and Viament are all owned by France-based Viacome.
Viaments chief executive, Christian Bacher, said in a statement the deal is a landmark moment in the history of the television industry and he’s delighted to be part of it.
“Viacomm and CBS share a common mission and shared vision to continue to deliver original content and programming across all platforms.
We look forward to a successful partnership, and look forward with the continued support of our shareholders and partners,” he said.