Paramount Global’s sale of its 13.01% stake in Viacom18 to Reliance Industries (RIL) has provided the company with an opportunity to exit the Indian joint venture (JV) with an attractive return on investment, a top company executive said.
Paramount fully exited Viacom18 last month after selling its remaining 13.01% stake to RIL for ₹4,286 crore ($517 million). The company will continue to licence its content to Viacom18.
Its Paramount+ streaming service is available on Viacom18’s JioCinema as a content block under the premium subscription tier. Viacom18 will continue to operate TV channels under Paramount-owned brands like MTV, Vh1 and Nickelodeon.
“Selling our stake in Viacom18 provided an opportunity to exit our ownership position with an attractive financial return on our investment while preserving our ability to monetise our content in India through ongoing licensing arrangements,” Paramount Global CFO Naveen Chopra told analysts during the company’s Q1 earnings call.
He also said that the after-tax proceeds will further benefit leverage when the transaction closes at the end of 2024 or early 2025, subject to regulatory approval.
The RIL-Paramount transaction is subject to the closure of the merger agreement between RIL, Walt Disney’s Star India and Viacom18.
Last year, Paramount saw its stake in Viacom18 get diluted to 13.01% following a ₹15,145 crore fund infusion by RIL and Bodhi Tree Systems. Subsequently, Viacom18 became a subsidiary of RIL with Bodhi Tree also holding a 16% stake.
The company’s stake got diluted since it didn’t want to infuse growth capital into Viacom18 for investments in sports and digital businesses. Before the fund infusion, the American entertainment company held a 49% stake in Viacom18.
Paramount realised a non-cash gain of $168 million from the dilution of a 36% stake in Viacom18.
In February, RIL, Disney and Viacom18 decided to merge Viacom18 into Star India to create a $8.5 billion media giant. RIL and its subsidiary Viacom18 will own a 63% stake in the proposed merged entity, while Disney will hold the rest.
