Reliance, Disney complete transaction for $8.5-billion merger deal to create India’s largest media powerhouse | Company Business News

Reliance-Disney merger: Billionaire Mukesh Ambani-led Reliance Industries has completed the merger of its media assets with the India business of global media house Walt Disney and formed a joint venture with a valuation of over ₹70,000 crore.

The JV will be one of the largest media and entertainment companies in India with a combined revenue of approximately ₹26,000 crore and will be led by Nita Ambani as its chairperson, according to a joint statement.

The venture formed after the merger of the media and JioCinema businesses of Viacom18 into Star India “has become effective”. It has allotted shares to Viacom18 and RIL as consideration for the assets and cash, respectively.

“The transaction values the JV at ₹70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies,” it said.

At the closing of the transactions, the said JV is controlled by RIL, the statement added.

In this, 16.34 per cent is owned by RIL, 46.82 per cent by its step-down unit Viacom18 and the rest 36.84 per cent by Disney.

“Nita M Ambani will be the Chairperson of the JV, with Uday Shankar as Vice Chairperson providing strategic guidance to the JV,” it said.

Meanwhile, in a separate transaction, RIL has bought out 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,” it said.

Bodhi Tree Systems is an investment platform jointly controlled by James Murdoch and Uday Shankar.

The JV will be spearheaded by three CEOs — Kevin Vaz, Kiran Mani and Sanjog Gupta — who will together lead the company.

Kevin Vaz will head the entertainment organisation across platforms, while Kiran Mani will take charge of the combined digital organization.

Sanjog Gupta will lead the combined sports organisation, which owns broadcasting rights of all matches organised by IPL, ICC and BCCI. Besides it has a wide portfolio of sports rights across football and other sports.

“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.

The JV will be the largest media and entertainment company in India, with a combined revenue of approximately ₹26,000 crore (USD 3.1 billion) for the fiscal year ended in March 2024.

RIL Chairman & Managing Director Mukesh Ambani said: “With the formation of this JV, the Indian media and entertainment industry is entering a transformational era.

“Our deep creative expertise and relationship with Disney, along with our 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,” he said.

Robert A Iger, CEO, The Walt Disney Company, said this is an exciting moment for our two companies

“By joining forces with Reliance, we are able to expand our presence in this important media market and deliver viewers an even more robust portfolio of entertainment, sports content, and digital services,” he said.

The JV operates over 100 TV channels and produces 30,000-plus hours of TV entertainment content annually. Through its two OTT platforms, JioCinema and Hotstar, it will have an aggregate subscription base of over 50 million and will compete with Amazon, Netflix and SonyLiv.

“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,” it said.

It has received the mandatory regulatory clearances from NCLT and fair trade regulator CCI.

The Competition Commission of India (CCI) had, on August 27 this year, approved the transaction subject to compliance with certain voluntary modifications offered by the parties.

Apart from the CCI, the transaction has been approved by anti-trust authorities in the EU, China, Turkey, South Korea and Ukraine, it said.

“The formation of the JV will herald a new era in India’s entertainment industry for consumers. This unique joint venture of Reliance and Disney brings together the companies’ content creation and curation prowess, world-class digital streaming capabilities along with a digital-first approach that will help the JV deliver unparalleled content choices at affordable prices to Indian viewers and the Indian diaspora globally,” it said.