Reliance To Acquire Paramount's 13 Per Cent Stake In Viacom18 For Rs 4,286 Crore

In February, Walt Disney and Reliance Industries had announced binding agreements to merge their media operations in India, aiming to establish a behemoth worth Rs 70,000 crore

Reliance also committed to investing Rs 11,500 crore at closing into the joint venture, aiming to bolster its competitiveness against rivals such as Sony and Netflix.

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Reliance Industries has announced its agreement to purchase a 13 per cent stake in Paramount Global's Indian TV business for Rs 4,286 crore, as revealed by the Indian conglomerate on Thursday. According to a filing with the stock exchange, Reliance has entered into a binding agreement with two subsidiaries of Paramount Global to acquire a 13.01 per cent equity stake in Viacom 18 Media Private Limited, held by Paramount Global.

Similarly, Paramount Global, in a filing with the US Securities and Exchange Commission (SEC), stated that the completion of the transaction is contingent upon meeting certain customary conditions, including regulatory approvals and the finalisation of a previously announced joint venture involving Reliance, Viacom18, and Star Disney.

"Following the closure, Paramount will retain its content licensing agreement with Viacom18," Paramount Global added.

Reliance Industries highlighted that Viacom18 is a significant subsidiary of TV18 Broadcast Ltd. The company currently possesses compulsorily convertible preference shares of Viacom18, representing a 57.48 per cent equity stake on a fully diluted basis. Upon the conclusion of this transaction, Reliance's equity stake in Viacom18 will rise to 70.49 per cent on a fully diluted basis.

Earlier in February, Walt Disney Co and Reliance Industries had announced binding agreements to merge their media operations in India, aiming to establish a behemoth worth Rs 70,000 crore.

Under the terms of the deal, just over a month after the failed $10 billion merger attempt between Zee and Sony, Reliance and its affiliates will hold a 63.16 per cent stake in the combined entity, which will include two streaming services and 120 television channels.

Disney will retain the remaining 36.84 per cent, as stated by the companies. As part of the transaction, Viacom18's media operations will merge into Star India Pvt Ltd (SIPL) through a court-approved scheme of arrangement.

Reliance also committed to investing Rs 11,500 crore at closing into the joint venture, aiming to bolster its competitiveness against rivals such as Sony and Netflix. The combined entity is poised to have the largest OTT subscriber base.

Reliance's media ventures currently operate under Network 18, which owns TV18 news channels, entertainment channels (under the 'Colors' brand), sports channels, and stakes in various digital platforms and publications.

The joint venture between Walt Disney and RIL will be overseen by Nita Ambani, wife of Reliance Chairman Mukesh Ambani, with Uday Shankar as the vice chairperson. Shankar, a former senior executive at Disney, has a joint venture with James Murdoch called Bodhi Tree.

The deal valued the joint venture at Rs 70,352 crore ($8.5 billion) on a post-money basis, excluding synergies.

The joint venture is poised to become a leading TV and digital streaming platform for entertainment and sports content in India, integrating iconic media assets across entertainment and sports, including exclusive rights to distribute Disney films and productions in India.

This merger marks a significant move in the Indian media landscape, in contrast to the failed plans between Sony and Zee, which resulted in litigations and arbitrations between the two companies.