TV18 will raise its stake in the company to 51% by acquiring 1% of Viacom18's equity from Viacom Inc. for a cash consideration of $20 million
TV18 Broadcast Ltd on Wednesday said it will take operational control of Viacom18 Media Pvt. Ltd, a equal joint venture between TV18 and US-based media company Viacom Inc.
TV18 will raise its stake in the company to 51% by acquiring 1% of Viacom18’s equity from Viacom for a cash consideration of $20 million, the company said in a statement. Viacom and Viacom18 have also extended their brand and content licence agreement by 10 years (the original 10-year agreement expired this year).
“The new GAAP framework, known as Indian accounting standards, is more principles-based with regard to the concept of “control accounting". It is not uncommon for companies to restructure to be able to reflect the economic substance of their holdings. In several cases, this allows entities to consolidate as compared to following bright lines in the erstwhile framework," said Priyanka Chaudhary, partner at Grant Thornton India Llp.
Viacom18 runs 44 TV channels across 80 countries and has interests in broadcast, films, digital, merchandising and live events.
TV18 and Viacom18 Media Pvt. Ltd also have a joint venture IndiaCast for distribution of TV channels.
“The transaction further enables our vision for Viacom18 to accentuate its focus on excellence and integration in the broadcast and digital space. The entertainment powerhouse continues to be bolstered by Viacom’s global expertise in content creation and curation, along with Network18 group and affiliates’ strength across the media & telecom value-chain," Adil Zainulbhai, chairman at Network18, said in a statement.
For 2016-17, Viacom18 had reported revenue of Rs3,040.7 crore. Network18-owned TV18, which operates news channels CNN-News18 and CNBC-TV18, had recorded a revenue of Rs277.3 crore in the December quarter, up from Rs254.7 crore in the year-ago period.
“… As a result of this transaction, we believe it (Viacom18) will be even better-positioned for accelerated growth through closer integration and alignment with the Network 18 group and its affiliates, including India’s fastest growing mobile network, Jio. Viacom remains strongly committed to our Viacom18 joint venture with the Network18 Group and we are retaining the vast majority of our ownership stake in the company," said David Lynn, chief executive officer at Viacom International Media Networks, in a statement.
Sudhanshu Vats, group chief executive officer at Viacom18, said, “We turned 10 last year and our growth journey has been exciting to say the least. None of this would have been possible without the support and commitment of both our partners. This development will allow us to leverage deeper synergies with Jio as we enter our next growth phase."
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