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Viacom board opts to split company
Redstone will act as chairman of both companies.
Viacom Incorporated
Sumner M. Redstone
Tom Freston

NEW YORK (CNN) -- The board of directors of the global media giant Viacom said Tuesday they have decided to split Viacom into two publicly traded companies -- one of them a "new Viacom" -- through a spin-off to stockholders.

As a result of the tax-free transaction, stockholders will hold shares in both companies.

One of the new companies will retain the Viacom name and include MTV Networks, BET, Paramount Pictures, Paramount Home Entertainment and Famous Music.

The other company, to be called CBS Corporation, will combine the CBS and UPN broadcast networks, Viacom Television Stations Group, Infinity Broadcasting, Viacom Outdoor, the CBS, Paramount and King World television production operations, as well as Showtime, Simon & Schuster and Paramount Parks.

Sumner Redstone, chairman and CEO of Viacom, will act as chairman of both companies. Tom Freston will lead Viacom, while Leslie Moonves will head CBS. Both are company insiders.

In March, Viacom announced it was exploring the idea of splitting the company into two entities.

Viacom says it hopes the split will help boost its stock price.

Shares of the company have lost about one-third of their value since Viacom bought CBS in May 2000. At the time, shares of Viacom were trading at about $55. Viacom stock closed at about $35 Tuesday.

The "spin-off" news came out after the closing bell, so shares did not move during regular trading. Viacom stock moved rose slightly in regular trade.

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