Reliance, Disney complete transaction for $8.5-billion merger deal to create India’s largest media powerhouse
- Reliance-Disney merger: Reliance Industries holds a 16.34 per cent stake in the join venture, while its step-down unit Viacom18 holds 46.82 per cent and Disney the rest 36.84 per cent.
Reliance-Disney merger deal: Billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL), its step-down unit Viacom18 Media Pvt Ltd, and Walt Disney Company announced the completion of the transaction on Thursday, November 14, to form a joint venture (JV) valued at ₹70,532 crore ($8.5 billion) to create India's largest media and entertainment powerhouse.
The deal involves merging Viacom18's media and JioCinema businesses into Star India Private Limited (SIPL), which is now officially effective. This means that RIL has merged its media assets with the India business of global media house Walt Disney. The oil-to-telecom conglomerate announced that it invested ₹11,500 crore (~$1.4 billion) into the JV for its growth.
The merger will create India's biggest entertainment player, with 120 TV channels and two streaming services. It will compete with Sony, Netflix, and Amazon. At the closing of the transaction, RIL will control the said JV with a stake of 16.34 per cent, while its step-down unit Viacom18 holds a majority stake of 46.82 per cent and Disney the rest 36.84 per cent.
Reliance-Disney merger: Top management
RIL's Nita Ambani will chair the media conglomerate, while Uday Shankar will serve as Vice Chairperson and provide strategic guidance to the JV. The venture has been split into three divisions, each with its own CEO. The newly formed divisions are entertainment ---which houses Reliance's Colours television channels and Disney's Star; digital --which encapsulates online streaming platforms JioCinema and Hotstar, as well as sports.
"The JV is home to the most iconic and engaging media brands in India across TV and digital platforms. The combination of ‘Star’ and ‘Colors’ on the television side and ‘JioCinema’ and ‘Hotstar’ on the digital front will provide an extensive choice of content across entertainment and sports to viewers in India and globally," said the media giants in the statement.
“The JV will be spearheaded by three CEOs who will lead the company into a new era of ambition and disruption,” it added. Former Google executive Kiran Mani, who leads JioCinema, will take charge of the digital organisation. The entertainment division will be led by Kevin Vaz, the top boss at Reliance's Viacom 18 Media. Sanjog Gupta, who heads sports at Disney's Indian media operations, will take charge of the JV's sports division.
Notably, Gupta will lead the combined sports organisation, which owns the broadcasting rights to all matches organised by IPL, ICC and BCCI. It has a wide portfolio of sports rights across football and other fields. "Together, they will leverage their unique strengths to cultivate a bold, transformative vision that challenges the status quo and sets new standards in the industry," it said.
“Our deep creative expertise, relationship with Disney, and unmatched understanding of the Indian consumer will ensure unparalleled content choices at affordable prices for Indian viewers. I am very excited about the JV's future and wish it all the success,” said Mukesh Ambani, Chairman & Managing Director of RIL.
Reliance-Disney merger: Details of TV, digital-first streaming channels
The JV will transform India’s digital streaming ecosystem and grow the linear TV space across entertainment and sports. The merger will herald a new era for consumers in India’s entertainment industry. According to the statement, the JV brings together content creation and curation prowess, world-class digital streaming capabilities, and a digital-first approach, which will help it deliver unparalleled content choices to viewers and the Indian diaspora globally.
"By joining forces with Reliance, we can expand our presence in this important media market and deliver viewers an even more robust portfolio of entertainment, sports content, and digital services," said Robert A Iger, CEO of The Walt Disney Company.
The JV will be one of India's largest media and entertainment companies with pro forma combined revenue of approximately ₹26,000 crore (~$3.1 billion) for the fiscal year ended March 2024. The JV operates over 100 TV channels and produces 30,000+ hours of TV entertainment content annually. The JioCinema and Hotstar digital platforms have an aggregate subscription base of over 50 million.
India's antitrust regulator, the Competition Commission of India (CCI), approved the transaction on August 27 this year, subject to compliance with certain voluntary modifications offered by the parties. Besides the CCI, anti-trust authorities in the EU, China, Turkey, South Korea, and Ukraine have also approved the transaction. The merger was also approved by the National Company Law Tribunal (NCLT) and the Ministry of Information and Broadcasting (I&B).
Meanwhile, in a separate transaction, RIL bought a 13.01 per cent stake of Paramount Global, an American multinational entertainment conglomerate, in Viacom18 for ₹4,286 crore. As a result, Viacom18 is owned 70.49 per cent by RIL, 13.54 per cent by Network18 Media & Investments Ltd, and 15.97 per cent by Bodhi Tree Systems on a fully diluted basis. Bodhi Tree Systems is an investment platform jointly controlled by James Murdoch and Uday Shankar.
Also Read: Reliance Q2 result: Profit, EBITDA decline YoY; 5 key takeaways from RIL September quarter earnings
“Excited to be partners in this journey to disrupt India's media and entertainment industry. The new organisation is committed to delivering unprecedented creativity, disruption and new-age consumer experience," said Uday Shankar, Co-Founder of Bodhi Tree Systems.
"As media consumption continues to move to an integrated TV-digital ecosystem, the merger of Viacom18 and Star India offers a unique opportunity to reorient the industry to better serve diverse cohorts of consumers across the country. Together, we aim to build India’s largest integrated media platform, which will deliver unparalleled experiences in innovative and exciting ways," added Shankar.
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Business NewsCompaniesNewsReliance, Disney complete transaction for $8.5-billion merger deal to create India’s largest media powerhouse
First Published:14 Nov 2024, 05:52 PM IST
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