Reliance Industries Limited (RIL), Viacom18, and Walt Disney have signed definitive agreements to form a joint venture by merging Viacom18’s media operations into Star India through a court-approved scheme of arrangement.
The Mukesh Ambani-led RIL has committed to investing Rs 11,500 crore ($1.4 billion) in the JV, which is valued at Rs 70,352 crore ($8.5 billion) post-money, excluding synergies.
RIL, Viacom18, and Disney will own 16.34%, 46.82%, and 36.84% of the JV, respectively. RIL will control the JV as it also owns a majority stake in Viacom18.
Star and Viacom18 are owned by Disney and Reliance, respectively. Bodhi Tree Systems also owns a roughly 16% stake in Viacom18.
Nita Ambani will serve as the Chairperson of the JV, while Uday Shankar will provide strategic guidance to the JV as its Vice Chairperson.
The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment and sports including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.
The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.
Disney may contribute additional media assets to the JV, pending regulatory and third-party approvals. The JV will acquire exclusive distribution rights for Disney films and productions in India, along with a license to over 30,000 Disney content assets.
Speaking about the JV, RIL CMD Mukesh D 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. We welcome Disney as a key partner of Reliance group.”
The Walt Disney Company CEO Bob Iger said, “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.”
Bodhi Tree Systems co-founder Uday Shankar said, “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”
The transaction is subject to regulatory, shareholder, and other customary approvals and is expected to be completed in the last quarter of Calendar Year 2024 or the first quarter of Calendar Year 2025.
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 RIL 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 the 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 Star India.
