After months of speculation, the mega merger has been officially announced.
Key points to note –
- Reliance Industries (RIL), Viacom 18 Media Private Ltd, and The Walt Disney Company (Disney) have signed binding definitive agreements to form a joint venture (JV) which will combine the businesses of Viacom18 and Star India.
- Viacom 18 is majorly (60.37%) owned by RIL group entities and balance by TV18 – 13.54%, Bodhi Tree – 13.08% and Paramount Global – 13.01%.
- RIL will invest Rs 11,500 cr into the JV for growth. Subject to regulatory and third-party approvals, Disney may also contribute certain additional media assets to the JV.
- The transaction values the JV at Rs 70,352 crore (~US$ 8.5 bn) on a post-money basis.
- The JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney.
- Mrs. Nita M. Ambani will be the Chairperson of the JV with Mr. Uday Shankar (from Bodhi Tree and the former President of Walt Disney Asia Pacific) as Vice Chairperson providing strategic guidance to the JV.
This merger sets stage for a significant disruption in the Indian media space.
Reliance Industries is buying Paramount Global’s 13.01% stake in Viacom 18 Media for about $517 million (Rs 4,286 cr)
https://www.livemint.com/industry/media/reliance-to-buy-paramount-global-s-13-stake-in-viacom18-for-rs-4-286-crore-11710389369935.html
The Competition Commission of India (CCI) is rumoured to have raised preliminary concerns on the merger that it might harm competition due to their power over cricket broadcast rights.
https://www.newindianexpress.com/business/2024/Aug/21/reliance-disney-merger-cci-raises-concern-over-cricket-broadcast-rights
Unlikely that these concerns would halt the merger. Companies will try their best to assuage the concerns to the satisfaction of the regulator.
RIL and Walt Disney are mulling to propose to the CCI a two-year freeze on advertising rate cards to allay CCI’s concerns.
https://economictimes.indiatimes.com/industry/media/entertainment/media/reliance-disney-may-offer-2-year-ad-rate-freeze-to-secure-cci-nod/articleshow/112695502.cms?from=mdr
CCI has approved the merger “subject to the compliance of voluntary modifications”.
Reliance and Disney have agreed to divest some television channels from their portfolio as well as committed to advertising price caps for streamed cricket matches to address regulator’s concerns.
https://timesofindia.indiatimes.com/business/india-business/ril-disneys-8-5-billion-merger-gets-cci-nod/articleshow/112880749.cms