By Jessica Toonkel
(Reuters) - CBS Corp <CBS.N> and Viacom Inc <VIAB.O> have formed special committees to explore a merger, the companies said on Thursday, the first step in potentially reuniting the companies split by media mogul Sumner Redstone more than a decade ago.
In separate statements, each company said that there is no assurance that the process will result in a transaction, and they would not comment further until the process is completed.
Viacom shares rose 1.5 percent to $33.70 in after-hours trading, and CBS shares climbed 0.5 percent to $59.25.
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The companies had previously explored a merger in 2016 at the urging of ailing 94-year-old Sumner Redstone and his daughter Shari, who control CBS and Viacom through privately held National Amusements Inc.
Those talks failed due to concerns by CBS' directors and Moonves over governance issues and the deal's financial sense for CBS shareholders.
But Shari Redstone has continued to discuss with executives at both companies her desire to merge the two, which intensified after Walt Disney Co <DIS.N> announced in December it would buy a majority of Twenty-First Century Fox Inc's <FOXA.O> assets, sources have said.
"National Amusements supports the processes announced by CBS and Viacom to evaluate a combination of the two companies, which we believe has the potential to drive significant, long-term shareholder value," the company said in a statement.
CBS Chief Executive Leslie Moonves and Viacom CEO Bob Bakish held discussions in January about a potential deal. The boards of both companies decided on Thursday to begin a formal process to explore the deal through special committees.
The deal would pair CBS's broadcast network, television studios and Showtime cable network with Viacom's Paramount Pictures, Comedy Central, Nickelodeon and MTV.
That could help CBS' streaming service compete with Netflix Inc <NFLX.O> and boost the combined company's leverage with cable and satellite distributors.
It also could provide an edge with advertisers, UBS analyst John Hodulik said in a research note. CBS would gain access to Viacom technology that uses data to help brands better target their messages, and the combined company could sell packages across the broadcast and pay TV networks.
"Increased scale in ratings would allow the combined company to go into the ad market with a larger inventory across a broader demographic," Hodulik said, "potentially allowing for higher overall ad rates by selling across properties."
"We expect a transaction to be a positive development for both sets of shareholders in the near term," he added.
(Reporting by Lisa Richwine and Jessica Toonkel; Editing by Nick Zieminski and Susan Thomas)