Reliance, Disney Seal Rs 70,352 Cr Joint Venture Deal For Media Merger
Reliance Industries (RIL), Viacom 18 Media (Viacom18) and The Walt Disney Company (Disney) have officially signed binding definitive agreements to establish a joint venture (JV) that will amalgamate the operations of Viacom18 and Star India.
In this process, Viacom18's media business will be integrated into Star India (SIPL) through a court-approved arrangement. As part of the deal, RIL is set to invest ₹11,500 crore into the JV to support its growth strategy. The transaction values the JV at ₹70,352 crore on a post-money basis, excluding synergies. Upon completion of the outlined steps, RIL will control the JV, holding a 16.34 per cent stake, while Viacom18 and Disney will own 46.82 per cent and 36.84 per cent, respectively.
Speaking about the JV, Mukesh D Ambani, Chairman & Managing Director of Reliance Industries, said, “This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”
Disney might include specific extra media assets in the JV, pending regulatory and third-party consent.
Nita M. Ambani has been appointed as the Chairperson of the JV, and Uday Shankar will serve as Vice Chairperson, offering strategic direction to the JV.
The joint venture is expected to become a prominent TV and digital streaming platform for entertainment and sports content in India. It will consolidate media assets in the entertainment sector (such as Colors, StarPlus, StarGOLD) and sports sector (including Star Sports and Sports18), offering access to highly anticipated events on both television and digital platforms through JioCinema and Hotstar. With a viewership exceeding 750 million in India, the JV will also serve the Indian diaspora globally.
Bob Iger, CEO of The Walt Disney Company, said, “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company. Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”
The JV will seek to lead the digital transformation of the media and entertainment industry in India and offer consumers high-quality and comprehensive content offerings anytime and anywhere. Leveraging the media expertise, advanced technology and diverse content libraries of Viacom18 and Star India, the JV is well-positioned to provide sports live-streaming services in addition to domestic and international entertainment content. By incorporating Disney's acclaimed films and shows into Viacom18's well-known productions and sports offerings, the JV aspires to offer an innovative and convenient digital entertainment experience at affordable prices, catering to audiences in India and the global Indian diaspora.
The joint venture will exclusively distribute Disney films and productions in India, holding the license for over 30,000 Disney content assets. This grants the JV the capability to offer a comprehensive array of entertainment options for the Indian consumer.
Uday Shankar, Co-founder of Bodhi Tree Systems, said, “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”
The completion of the transaction, expected in the last quarter of 2024 or the first quarter of 2025 is contingent upon obtaining regulatory, shareholder and customary approvals.
Goldman Sachs provides financial and valuation advisory while Skadden, Arps, Slate, Meagher & Flom LLP, Khaitan & Co and Shardul Amarchand Mangaldas & Co serve as legal counsels to RIL and Viacom18. Ernst & Young offers an independent valuation, and HSBC India, acting as a financial advisor, provides a Fairness Opinion to Viacom18.
The Raine Group leads as financial advisor to Disney and Citi serves as a financial advisor to Disney, with Cleary Gottlieb as lead outside counsel, and Covington & Burling and AZB as legal counsels. BDO offers an independent valuation to SIPL.
