NEW WORK. Sept 8 : Viacom and CBS announced that they would merge yesterday, creating one of the world's leading media groups capable of rivaling Dis-ney^and time Warner, reports

Viacom will buy CBS shares in a stock swap purchase estimated to be worth about 35 billion dollars. The companies said the deal had an "enterprise value" of 80 billion dollars.

The new company, to be called Viacom, will be headed by Sumner Redstone, current chairman and CEO of Viacom.

It pairs CBS. one of the big three US broadcast networks — alongside NBC (owned by General Electric) and ABC (part of ■ the Disney Group) — with Viacom's diverse properties in cable, publishing and film-production.

Together, the two "will be the world's leading company in the production, promotion and distribution of entertainment, news, sports and music," a joint statement from the companies said.

The merger was made possible by an easing of federal rules on ownership of television stations and of production facilities, but took analysts by surprise in spite of rumors of a deal.

The new company will have revenues of 21 billion dollars ‘against Disney's 24 billion and Time Warner's 16 billion.

Viacom includes the mediaentertainment groups Blockbuster. MTV Networks. Paramount Pictures, Paramount Television. Spelling Television. Paramount Parks. Shdwtime Networks as well as publisher Simon and Schuster. 19 television stations, and international theatrical exhibition operations, Viacom also owns half-interests in the Comedy Central cable channel, the UPN television network. 1

CBS Corporation is composed of CBS Television, cable and a majority stake in Infinity Broadcasting Corporation, its radio and outdoor advertising business. It also has 15 CBS owned television stations.