S&P Global Ratings on Aug. 14 placed Viacom Inc.'s ratings, including the BBB- issuer credit rating, on Creditwatch positive after the company announced plans to merge with CBS Corp.
The rating agency also revised its outlook on CBS Corp. to stable from negative.
The combined entity, which will be rebranded as ViacomCBS, will bring together a broadcaster, cable networks and premium cable network Showtime (US).
S&P estimates that the adjusted leverage for the merged company is about 3.25x. The rating agency expects the merged company to operate with adjusted leverage of 3x or below.
S&P noted that although the combined company's film and television studio segments are weaker than that of other competitors, it could generate "significant synergies and would be stronger than the individual components."
The rating agency said it would resolve Viacom's Creditwatch placements when the deal closes. Should the transaction fail to materialize, S&P likely will remove the ratings from Creditwatch and assign a stable rating outlook to the company.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
