End to Viacom power struggle officially formalized

Media giant Viacom announced a formal agreement Saturday in its nasty corporate power struggle, under which mogul Sumner Redstone will remain atop his empire and chief executive Philippe Dauman leaves the company.

Under terms of the deal, Dauman will also end his legal battles against Redstone and his daughter, Shari.

The agreement, which was presented Friday in an internal memo, settles all disputes between parties and "all lawsuits among them will be terminated," a statement by Viacom said.

Dauman will "resign immediately as president and chief executive officer" and be replaced by chief operating officer Tom Dooley until September 30, with the board to decide his permanent successor.

Viacom's management, led by Dauman and board member George Abrams, had alleged in court that Shari Sumner effectively controls her ailing father and was making a power grab for his $40 billion media empire.

Under the agreement Dauman will remain as non-executive chairman of the board through September 13, giving him a chance to pitch his plan to sell a minority stake of Paramount Pictures, which is controlled by Viacom.

The agreement also expands the size of the board, adding five new directors nominated by National Amusements, Sumner Redstone's holding company.

"I care deeply for Viacom, which has been an important part of my life since I joined Sumner in the acquisition of the company 30 years ago," Dauman said in the statement.

"I believe this agreement will give the company and its employees the best opportunity to continue a smooth evolution into the future," he said.

Shari Redstone thanked Dauman for "his many years of dedicated service and the important role he has played at Viacom."

"We also welcome the new board members who join us today. By strengthening Viacom's governance and leadership, these changes will enable the company to embark swiftly on a strategy that strengthens its position as an industry leader," she said.

In addition to Paramount Pictures, Viacom controls hit names like MTV, Nickelodeon, and Comedy Central.

Sumner Redstone, a Hollywood legend whose fortune is estimated at $5 billion, is also the majority shareholder in CBS media group.