Reliance, Disney Announce Joint Venture, RIL To Invest At Closing ₹11,500 Crore
In a significant development that can reshape India”s media and entertainment landscape, India’s oil to telecom conglomerate Reliance Industries Limited (RIL), Viacom 18 Media Private Limited (Viacom18), and The Walt Disney Company (NYSE:DIS) have inked binding definitive agreements to establish a joint venture (JV). The collaboration will amalgamate the operations of Viacom18 and Star India, marking a strategic convergence of iconic media assets in the country. According to reports around 120 television channels in India will come under this JV and the cricket broadcasting in the country will be a monopoly of the JV.
Under the terms of the agreement, RIL will inject a substantial investment of ₹11,500 crore (~US$ 1.4 billion) into the JV at closing, signifying a robust commitment towards its growth trajectory. The transaction values the JV at ₹70,352 crore (~US$ 8.5 billion) post-money, excluding synergies, positioning it as a formidable force in the Indian entertainment domain. Upon completion, the JV will be predominantly controlled by RIL, with ownership distributed as 16.34% by RIL, 46.82% by Viacom18, and 36.84% by Disney.
The newly formed entity, helmed by Nita Ambani as Chairperson and Uday Shankar as Vice Chairperson, is poised to become a frontrunner in television and digital streaming platforms, boasting a comprehensive portfolio of entertainment and sports content. With access to renowned brands such as Colors, StarPlus, StarGOLD, Star Sports, and Sports18, along with JioCinema and Hotstar, the JV is primed to cater to over 750 million viewers in India and the global Indian diaspora.
Aiming to spearhead the digital transformation of India”s media landscape, the JV endeavors to provide consumers with high-quality and diverse content offerings across multiple platforms. Leveraging the collective expertise and extensive content libraries of Viacom18 and Star India, complemented by Disney”s acclaimed productions, the JV is committed to delivering an innovative and accessible digital entertainment experience at competitive prices.
Furthermore, the JV will hold exclusive rights to distribute Disney films and productions in India, bolstering its entertainment repertoire with access to over 30,000 Disney content assets. The collaboration is poised to set new benchmarks in the Indian entertainment sector, aligning with the vision of accelerating the digital revolution in the country.
Expressing optimism about the partnership, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, remarked, “This is a landmark agreement that heralds a new era in the Indian entertainment industry.” He underscored the strategic significance of joining forces with Disney, a global media powerhouse, to deliver unparalleled content offerings to audiences across India.
Echoing similar sentiments, Bob Iger, CEO of The Walt Disney Company, emphasized the vast potential of the Indian market and the opportunities presented by the joint venture to create long-term value. He lauded Reliance”s deep understanding of the Indian consumer landscape, envisioning the JV as a catalyst for innovation and growth in the media and entertainment sector.
The transaction, subject to regulatory and shareholder approvals, is slated for completion in the last quarter of Calendar Year 2024 or the first quarter of Calendar Year 2025. Goldman Sachs, Skadden, Arps, Slate, Meagher & Flom LLP, Khaitan & Co, Shardul Amarchand Mangaldas & Co, The Raine Group, Cleary Gottlieb, Covington & Burling, AZB, Ernst & Young, and HSBC India are among the key financial and legal advisors facilitating the transaction.
