On Wednesday, Paramount Global, a big American company that makes movies and TV shows, said it’s selling its stake in an Indian media company, Viacom18, to another Indian company, Reliance. The deal is worth₹4,286 Crore ($517 million).
Reliance Industries, based in India, is buying Paramount’s entire 13.01% stake in Viacom 18 Media for about the same amount. Viacom18 owns lots of TV channels, like Comedy Central and Nickelodeon. Even after the sale, Paramount will still let Viacom18 use its shows. Reliance is also planning to merge with Walt Disney in India, but that hasn’t happened yet.
Disney and Reliance Merger Plan
Paramount Global mentioned that the completion of the transaction is still pending regulatory approval. This includes finalizing a deal announced in February involving Reliance, Viacom18, and Disney.
Last month, Disney and Reliance agreed to merge their Indian media businesses, aiming to create a big entertainment company worth $8.5 billion in India.
According to the plan, Disney will combine its Indian TV subsidiary with Viacom18, with Reliance leading this partnership. Disney will own 36.8 percent, Reliance 16.3 percent, and Viacom18 46.8 percent of the joint venture.
Reliance’s Majority Ownership and Disney’s Struggles
Reliance’s ownership of TV18, which includes Viacom18 as a subsidiary, will grant them a majority stake in the joint venture. This control will strengthen further after the Paramount transaction. Disney, on the other hand, has faced challenges operating independently in India’s vast media landscape. The collaboration between Reliance and Disney aims to counter competition from traditional rivals like Zee Entertainment and Sony, as well as streaming platforms like Amazon and Netflix.
With Reliance’s stake in Viacom18 set to exceed 70 percent post-transaction, the deal signifies a significant consolidation of power. Additionally, Paramount’s commitment to licensing content to Viacom18 underscores the ongoing partnership between the two entities.
Reliance and Disney’s Joint Venture Agreement
On February 28, Reliance and Disney announced a partnership to create a joint venture in India. This venture would bring together the businesses of Viacom18 and Star India. Viacom18 would merge with Star India Pvt Ltd through a court-approved arrangement as part of the deal. Reliance also committed to investing ₹11,500 crore into the joint venture, valued at ₹70,352 crore after the investment.
Reliance will hold the majority stake in the joint venture, with an effective ownership of 55-60%. Disney will own 36.84%, while Bodhi Tree, a joint venture between Uday Shankar and James Murdoch’s Lupa Systems, will own 6.1%.
Disney’s assets in India were valued at ₹25,806 crore, which was lower than expected due to potential sports-related losses. Surprisingly, Viacom18, including JioCinema, was valued at ₹33,046 crore in the deal.
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