Reliance and Disney agree to merge their respective digital streaming and television assets to capture the sports entertainment market in India and its diaspora.
Reliance Industries (RIL), Viacom 18 Media, and Disney signs binding definitive agreements to form a joint venture that will combine the businesses of Viacom18 and Star India. As part of the transaction, the media undertaking of Viacom18 will be merged into Star India Private Limited through a court-approved scheme of arrangement.
RIL has agreed to invest at closing ₹11,500 crore (~USD 1.4 billion) into the JV for its growth strategy.
The transaction values the JV at ₹70,352 crore (~USD 8.5 billion) on a post-money basis, excluding synergies. Post completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney.
Disney representatives says it may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals.
Nita M Ambani has been appointed Chairperson with Uday Shankar as Vice Chairperson providing strategic guidance to the JV.
The JV aims to be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to high value events across television and digital platforms through JioCinema and Hotstar.
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 at affordable prices. With the addition of Disney’s film and show catalogs to Viacom18’s productions and sports offerings, representatives of the JV claim it will offer a compelling, accessible, and novel digital-focused entertainment experience to over 750 million viewers India and the Indian diaspora.
The JV will also be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for Indian consumers.
Commenting on the JV, RIL Chairman and MD Mukesh D Ambani says that this is a landmark for India.
“It 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,” says Ambani.
Walt Disney Co CEO Bob Iger agrees.
“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,” says Iger.
According to Bodhi Tree Systems Founder Uday Shankar, the JV promises to “shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar”.
Bodhi Tree Systems is a strategic investor in consumer technology opportunities in Southeast Asia, with a particular focus on India. The entity is a platform of James Murdoch’s Lupa Systems and Uday Shankar and was established in 2021 to explore and invest in Southeast Asia and the Middle East. In addition to media, Bodhi Tree expects to invest in other consumer technology sectors that represent significant opportunities but suffer from a lack of capital and innovation – including healthcare and education. Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, is also an investor in Bodhi Tree Systems.
The transaction is subject to regulatory, shareholder and other customary approvals and is expected to be completed no later than the first quarter of 2025.
Notes from the Editor: Goldman Sachs is acting as financial and valuation advisor and Skadden, Arps, Slate, Meagher & Flom LLP, Khaitan & Co and Shardul Amarchand Mangaldas & Co are acting as legal counsels to Reliance and Viacom18 on the transaction. Ernst & Young has provided an independent valuation to RIL and Viacom18, while HSBC India acting as financial advisor has provided a Fairness Opinion to Viacom18.
The Raine Group is acting as lead financial advisor to Disney on the transaction. Citi is acting as a financial advisor to Disney. Cleary Gottlieb served as lead outside counsel to Disney and Covington & Burling and AZB served as legal counsel to Disney on the transaction. BDO has provided an independent valuation to SIPL.
