Reports suggest that stalks between CBS and Viacom to possibly merge are beginning to heat up.

The next step is for executives at both companies to finish complete valuations of each company. Reports suggest that, pending valuation, CBS would purchase Viacom through an all-stock transaction. CBS head Leslie Moonves would then become the CEO of the reunited CBS and Viacom. The valuation of Viacom is currently the biggest stumbling block for the deal.

CBS and Viacom previously merged in 2000 at the behest of media mogul Sumner Redstone. However, when stocks sagged over the next few years, Redstone had the two companies separate again. The separation split the rights to Star Trek, with Viacom maintaining the film rights through Paramount Pictures and CBS maintaining the television rights as well as licensing.

Redstone’s National Amusements has maintained control over both companies through preferred voting shares. Sumner’s daughter, Shari Redstone, now heads national amusements and is vice chair of both CBS and Viacom. Rumors have been circulating for some time that Redstone would like to bring the two companies back together to form a larger entity better equipped to compete in the current era of entertainment mega-corporations. It’s similar to the reasons 21st Century Fox decided to sell its entertainment assets, ultimately finding a buyer in Disney.

The hangup surrounding Viacom’s valuation is reportedly due to recent projections from media analysts. Those analysts suggest a brighter than expected outlook for Viacom due to recent changes made by new management. CBS will likely want to value Viacom based on where its cable assets and Paramount Pictures currently stand while Viacom will want to increase value based on the potential future value suggested by these new analyses.

“After several years of deteriorating trends, the company has taken a decisive turn in strategy to re-set its distribution relationships, re-focus its advertising approach using well-developed data and in-house ad technologies, and fix the Paramount studio,” Macquarie analyst Tim Nollen wrote in a February 28th research report. “Whether or not Viacom comes to a merger agreement with CBS, we believe it now has a better shot at returning to growth in the U.S.”

Other analysts wonder if this is a bad deal for CBS.

“CBS lines up very well with the relatively growth advantaged areas, while Viacom lines up well with the more growth challenged areas. On the basis of asset mix, we think that CBS is better off on its own than it is in acquiring Viacom,” Bryan Kraft of Deutsche Bank wrote in a March 19th report. “Viacom’s businesses, in our view, would detract from CBS’ revenue growth over the next several years and would force CBS to play more defense and less offense than it is playing now.”

Fans will have to wait and see how the merger talks shake out and what it means for Star Trek’s future.

Source: Variety