Reliance Industries Ltd has inked a momentous deal to assert itself as the principal partner in a groundbreaking joint venture with the Walt Disney Co., solidifying its position at the forefront of one of the globe’s most rapidly expanding media and entertainment markets.
The news broke on Wednesday as RIL subsidiary Viacom18 and Star India, Disney’s Indian arm, unveiled ambitious plans to amalgamate their operations, thereby creating one of India’s largest TV and digital streaming platforms. This move is poised to reshape the landscape of Indian media and entertainment.
According to the terms of the agreement, Viacom18’s media operations will amalgamate with Star India Pvt Ltd (SIPL) through a meticulously crafted court-approved arrangement. The joint venture, with a staggering valuation of Rs 70,352 crore ($8.5 billion), will witness a substantial injection of Rs 11,500 crore ($1.4 billion) from RIL, earmarked to fuel the venture’s ambitious growth strategy.
Following the implementation of these steps, the joint venture will fall under the control of RIL, with the distribution of ownership stakes delineated as follows: RIL holding 16.34%, Viacom18 46.82%, and Disney 36.84%. This allocation sets the stage for a strategic alignment of interests, leveraging the respective strengths and resources of the partners involved.
Leading the charge as Chairperson of the merged entity will be Nita Ambani, while former Walt Disney executive Uday Shankar is set to assume the role of Vice Chairperson. Their combined expertise and vision are expected to steer the joint venture towards unprecedented success in India’s dynamic media landscape.
A breakdown of the valuation reveals Star India’s business at Rs 28,000 crore ($3.1 billion) and Viacom18 at Rs 32,000 crore ($4 billion), underlining the significant market presence and potential synergies unlocked by this strategic partnership.
In terms of governance, the new board will comprise 10 members, with RIL nominating five, Disney three, and two independent directors. This balanced composition reflects a commitment to fostering collaboration and inclusivity in decision-making processes.
The primary objective of the joint venture is to assert dominance in both traditional television and the burgeoning digital streaming arena. With a combined viewership exceeding 750 million across India and the global Indian diaspora, the venture is poised to cater to diverse audience preferences and consumption habits.
Central to its strategic roadmap is the digital transformation of India’s media landscape, with a steadfast commitment to delivering high-quality content to consumers anytime, anywhere, and at affordable prices. Leveraging the extensive resources and creative prowess of Viacom18 and Star India, the joint venture aims to set new standards for innovation and viewer engagement.
Of particular significance is the inclusion of Disney’s acclaimed films and productions, granting the joint venture exclusive rights to distribute Disney content in India and access to a vast repository of over 30,000 Disney assets. This strategic advantage enhances the venture’s appeal and competitive positioning in the market.
Mukesh Ambani, Chairman of Reliance Industries, hailed the agreement as a watershed moment in the Indian entertainment industry, underscoring the unparalleled potential unleashed by the strategic partnership with Disney. He expressed confidence in the combined entity’s ability to deliver unparalleled content experiences to audiences nationwide.
Echoing this sentiment, Bob Iger, CEO of Walt Disney Co., emphasized India’s status as the world’s most populous market and highlighted the transformative opportunities presented by the joint venture. He expressed optimism regarding the long-term value creation prospects for both companies.
Uday Shankar, in addition to his role as Vice Chairperson, underscored the joint venture’s commitment to delivering exceptional value to audiences, advertisers, and partners. He positioned the collaboration as a catalyst for shaping the future of entertainment in India, aligning with the government’s vision of establishing Digital India as a global exemplar.
The transaction is subject to regulatory approvals, shareholder consent, and other customary formalities, with completion anticipated in the last quarter of 2024 or the first quarter of 2025. Goldman Sachs and Raine Group acted as financial advisors for the transaction, with legal counsel provided by Skadden, Arps, Slate, Meagher & Flom LLP, Khaitan & Co, and Shardul Amarchand Mangaldas & Co. Cleary Gottlieb and Covington & Burling served as legal counsels to Disney, with BDO offering an independent valuation to SIPL.
In conclusion, the Viacom18-Star India joint venture marks a historic milestone in the Indian media landscape, promising to redefine the future of entertainment for millions of viewers nationwide. As stakeholders eagerly await regulatory approvals and the finalization of the deal, anticipation runs high for the transformative impact of this strategic collaboration on India’s media and entertainment ecosystem.