Reliance Industries Limited and The Walt Disney Company have officially sealed a binding agreement on Wednesday to establish a robust $8.5 billion media conglomerate.
In a joint statement, the companies announced, "Reliance Industries Limited, along with Viacom 18 Media Private Limited and The Walt Disney Company, have entered into binding definitive agreements to establish a joint venture (“JV”) aimed at amalgamating the operations of Viacom18 and Star India."
Moreover, the press release confirming the merger specified, "As a component of this transaction, the media endeavors of Viacom18 will be amalgamated into Star India Private Limited (“SIPL”) through a scheme of arrangement endorsed by the court."
Outlined below are five pivotal points elucidating the Reliance-Disney media merger:
1. Substantial Valuation of the Merged Entity:
The combined entity resulting from the joint venture will command an impressive valuation of $8.5 billion or Rs 70,352 crore, positioning itself as a formidable player in India's media and entertainment landscape. Reliance and its subsidiaries will hold a majority stake of over 60 percent in the merged entity, with Disney owning the remaining 37 percent.
2. Integration of Viacom18's Media Business:
In adherence to the binding agreement, Viacom18's media operations will seamlessly integrate into Star India Private Limited (SIPL) through a court-sanctioned consolidation. This amalgamation will consolidate esteemed media assets encompassing popular entertainment channels such as Colors and StarPlus, along with esteemed sports channels including Star Sports and Sports18.
3. Reliance's Substantial Investment:
Reliance has committed to injecting Rs 11,500 crore (approximately US$1.4 billion) into the joint venture upon its culmination. Additionally, Disney may potentially contribute further media assets to the collaboration, subject to regulatory approvals and endorsements from third-party entities.
4. Leadership Appointments:
Nita Ambani, the esteemed spouse of billionaire Mukesh Ambani, is slated to assume the role of chairperson for the merged entity, while Uday Shankar is poised to serve as the vice chairperson. Earlier speculations suggested Nita Ambani as the front-runner for the chairpersonship, with Uday Shankar, a former Disney executive, anticipated to be her deputy.
5. Anticipated Synergies and Offerings:
Together, the amalgamated Reliance-Disney entity will boast an extensive repertoire comprising 120 TV channels and two streaming services. This strategic merger positions Mukesh Ambani's conglomerate as a formidable contender vis-à-vis entities like Sony, Zee Entertainment, and Netflix within the $28 billion media industry.
A joint statement issued by the companies delineated, "The JV will emerge as a leading TV and digital streaming platform for entertainment and sports content in India, amalgamating renowned media assets encompassing entertainment channels such as Colors, StarPlus, StarGOLD, and sports channels including Star Sports and Sports18, alongside offering access to highly anticipated events across television and digital platforms through JioCinema and Hotstar."
Additionally, the statement emphasized, "The JV will cater to an extensive viewer base exceeding 750 million individuals across India and will also cater to the Indian diaspora worldwide."
