Reliance, Disney announce joint venture; key highlights of ₹70,352 cr deal
Upstox
3 min read • Updated: February 29, 2024, 8:57 AM
Summary
Reliance Industries will invest ₹11,500 crore in the joint venture as part of a growth strategy. Post completion of the merger, RIL will have 16.34% stake in the JV, while Viacom18 and Disney will get 46.82% and 36.84% stakes, respectively.
Mukesh Ambani-led Reliance Industries has entered into a "binding" definitive agreement with Walt Disney to form a joint venture, under which the businesses of Viacom18 and Star India will be combined, the oil-to-telecom conglomerate informed the exchanges on Wednesday.
RIL to invest ₹11,500 crore in JV
Reliance Industries will invest ₹11,500 crore into the joint venture as part of a growth strategy. The mega combine is expected to lead to the digital transformation of the country's media and entertainment industry. It will offer consumers high-quality and comprehensive content anytime and anywhere.
Under the agreement, Viacom18's media undertaking will be merged into Star India through a "court-approved scheme of arrangement".
Post-completion shareholding pattern
Reliance Industries will have a controlling stake in the joint venture. RIL will hold 16.34% of the stake directly and another 46.82% through Viacom18. Disney will own the remaining 36.84% stake. The transaction values the JV at ₹70,352 crore on a post-money basis, excluding synergies.
As per the exchange filing, Disney is likely to add certain additional media assets to the joint venture, subject to regulatory and third-party approvals.
Who will be the chairperson of the joint venture?
Nita Ambani will be the chairperson of the JV, while media veteran Uday Shankar will be the Vice Chairperson. Shankar will be providing strategic guidance to the joint venture.
The JV entity will be "one of the leading TV and digital streaming platforms" for entertainment and sports content in India. The JV is all set to combine iconic media assets across the entertainment spectrum, like Colors, StarPlus, StarGOLD and Star Sports and Sports18 in the sports arena.
With this merger, JioCinema and Hotstar will have over 750 million viewers across India. They will also cater to the Indian diaspora worldwide.
The combination of the media expertise, cutting-edge technology, and diverse content libraries of Viacom18 and Star India will allow the JV to offer more appealing domestic and global entertainment content and sports live streaming services.
What management said after the deal announcement?
Commenting on the joint venture, RIL chairman Mukesh Ambani 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.”
The transaction is subject to regulatory, shareholder and other customary approvals. As per the company, the transaction could be completed in the last quarter of 2024 or the first quarter of the calendar year 2025.