In what would be the biggest media merger since Time married Warner four years ago, Paramount Communications and Viacom Inc. might announce a deal as early as this weekend, industry executives familiar with the negotiations said yesterday.
While each company is already a power in its own right, their merger would create a more viable force on a field increasingly ruled by giants like Time Warner, Sony and Capital Cities/ABC.
The deal, in which the executives said Viacom would acquire fTC Paramount for roughly $6.2 billion in stock and $1 billion in cash, would create one of the most powerful media companies in the country with a vast array of assets. They include a movie studio, cable systems and programming, television and radio stations and a book publisher.
Several executives close to the talks noted that the companies' chairmen -- Sumner M. Redstone at Viacom and Martin S. Davis at Paramount -- have held on-again, off-again talks for several years, and added that this latest round could fall apart at the last minute.
But one executive close to the proposed deal said talks had proceeded to the point that he felt fairly certain the merger would occur. Other executives said they believed the Viacom board would be meeting tomorrow.
After the talks broke down in July, Arthur L. Liman, a partner in the law firm of Paul, Weiss, Rifkind, Wharton & Garrison played a role in bringing the two men back to negotiating, according to people familiar with the discussions. Lazard Freres & Co., the investment banking firm, is representing Paramount.
Stock in both companies continued to rise yesterday, with Paramount closing at $61.125, up $4.25, and Viacom's class A voting shares edging up 37.5 cents, to $66, and the nonvoting class B stock rising 75 cents, to $59.375.
Paramount announced yesterday that first-quarter earnings rose 5.3 percent on strong sales of educational textbooks and the box-office success of the film "The Firm."
A combined Paramount-Viacom company would have a market capitalization of roughly $17 billion with about $2.4 billion in debt.