Reliance Industries and global media major Walt Disney signed a binding pact to merge their media operations in India in a $8.5-billion deal, creating a behemoth with 120 TV channels and two digital OTT platforms.
RIL-owned Viacom18 will be merged with Walt Disney’s local arm Star India, strengthening the Reliance’s hold over the country’s $28-billion media and entertainment industry. Reliance, along with Viacom18, will own 63% in the merged entity, while Disney will hold the remaining 37%.
Reliance will infuse $1.4 billion (£1.15 billion) in the merged company to finance its growth plans and consequently, the transaction will value the new entity at $8.5 billion (£7.03 billion). The announcement comes after Japan’s Sony Corp terminated a $10-billion merger between its local arm and Zee Entertainment Enterprises.
Nita Ambani, wife of Reliance chairman Mukesh Ambani, will lead the merged company’s board, while Uday Shankar, co-founder of Bodhi Tree Systems, will be its vice chairperson. Nita’s appointment comes nearly six months after she quit RIL’s board to focus on philanthropy.
The development marks Shankar’s return to Disney, where he was chairman of Star India. After quitting Disney, Shankar joined hands with British-American businessman James Murdoch to set up Bodhi Tree.
Bodhi Tree, in which Qatar Investment Authority and NBC Universal & Sky-owner Comcast are also shareholders, own about 13% in Viacom18. With a 47% stake, Viacom18 will be the largest shareholder of the merged entity, which will be controlled by Reliance, a joint statement said.
The merged entity will have over 750 million viewers across the country and will also cater to the Indian diaspora.