Viacom Inc. (VIA.B) Tuesday said its board approved the spin-off of its cable networks and film studios as a separate publicly traded company from its slower growing television and radio businesses.

Viacom is betting the two companies will be more valuable apart than together with the MTV (search), Nickelodeon and VH1 cable networks and Paramount Studios (search), which will retain the Viacom name, aimed at growth investors.

The other company will hold the more mature but cash generating businesses of CBS and UPN television networks, a handful of television stations and Infinity Broadcasting, dubbed CBS Corp., appealing to value investors.

"Over the last few years, Viacom has underperformed the rest of the media industry as the strength of the cable networks were pulled down by the struggles of the broadcasting business," said Stanford Group analyst Frederick Moran. "By splitting the company, they are streamlining their assets so they can get a more complete valuation."

Under the deal, which will be tax-free and is expected to be completed in the first quarter of 2006, the new Viacom will be run by Viacom's co-chief operating officer and MTV Networks head Tom Freston.

CBS will be run by co-chief operating officer Les Moonves (search), who currently heads those units for Viacom.

Sumner Redstone (search) will be chairman of both companies. The board also named Shari Redstone, Sumner's daughter and president of National Amusements, to the new post of non-executive vice chairman.

Viacom said details on the financial structures of the two companies will be made over the next several weeks.

Stanford's Moran notes that Viacom has been trading at 20 times its 2005 earnings, which is a historical low. "And these are assets with higher growth potential that will probably outpace its peers," he added.

The spin-off effectively dismantles one of the world's largest media companies, a move that other media companies are undertaking. Time Warner Inc. is planning to spin off its cable division. John Malone's Liberty Media has said he would spin off his company's 50-percent stake in Discovery Communications.

Viacom B shares are up 9 cents in after-market trading from Tuesday's close of $34.21 on the New York Stock Exchange.