Viacom,  owner  of  the  MTV  music   channel  and  the Blockbuster chain of video stores, will buy CBS Corp of the US for $35 billion in stock. This is the largest ever acquisition in the media world.

Viacom will swap its 1.085 ''class B'' shares for each share of CBS, which works out to $48.89 per share.

Both companies have had strong personalities leading them -- Sumner Redstone, chairman of Viacom, and Mel Karmazin, chief executive of CBS, who is expected to succeed Mr Redstone upon his retirement.

The US Federal Communications Commission had ruled in August 1999 that companies may own two television stations in a single market. But the rule that one company cannot own more than one broadcast network stays. The current deal will give Viacom''s movie and television studio a wider market. Viacom owns 19 television stations, and CBS owns 16.

The merger is expected to bring about synergistic effects to the companies. The merger will bring together CBS and Viacom''s Paramount Studio, which produces hit shows such as Frasier. CBS would get greater coverage and additional programming outlets to earn more advertising revenue.

For Viacom, CBS is a cash rich company, which will help it reduce its debt. CBS is also number one in the billboard business, which will also significantly help Viacom. Viacom also gets access to the huge collection of radio stations owned by CBS.

Viacom, which is currently the fourth largest media andv entertainment company in world, will become the second largest with this acquisition. The biggest company in this business is Time Warner Inc. Viacom also owns other cable television channels such as Nickelodeon and VH-1.