Disney merges media business with Reliance in $8.5 billion joint venture

Reliance Industries (RIL), Viacom18 and The Walt Disney Company have officially declared the signing of binding definitive agreements to establish a joint venture (JV) merging the businesses of Viacom18 and Star India. 

 

The partnership will involve the integration of Viacom18's media operations into Star India through a court-approved scheme of arrangement.

 

As part of the deal, RIL is set to inject $1.4 billion into the JV at closing, highlighting its commitment to the venture's growth trajectory. 

 

The transaction values the JV at $8.5 billion on a post-money basis, excluding synergies. 

 

Following the completion of these transactions, RIL will have a controlling stake of 16.34% in the JV, with Viacom18 owning 46.82% and Disney holding 36.84%.

 

The JV will be steered by Nita M. Ambani as chairperson, with Uday Shankar appointed as vice chairperson, offering strategic guidance. 

 

The collaboration aims to establish itself as a destination for television and digital streaming platforms, featuring a comprehensive portfolio of entertainment and sports content, including channels like Colors, StarPlus, StarGold, and sports networks such as Star Sports and Sports18.

 

By leveraging Viacom18 and Star India's diverse content libraries and technology, the JV seeks to drive the digital transformation of India's media and entertainment landscape. 

 

The integration of Disney's films and shows with Viacom18's extensive productions promises to deliver an innovative and convenient digital entertainment experience to Indian audiences and the global Indian diaspora.

 

Disney will grant exclusive rights to distribute its films and productions in India to the JV, providing access to over 30,000 Disney content assets. 

 

This move further enriches the entertainment options available to Indian consumers, reinforcing the partnership's position as a leading provider of high-quality content across multiple platforms.

 

The transaction is subject to regulatory and shareholder approvals and is expected to be finalised in the last quarter of calendar year 2024 or the first quarter of calendar year 2025. 

 

Goldman Sachs, Skadden, Arps, Slate, Meagher & Flom LLP, and Ernst & Young are among the financial and legal advisors involved in facilitating the transaction.

 

Mukesh D Ambani, chairperson and managing director, Reliance Industries, said, “This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”  

 

Bob Iger, CEO, The Walt Disney Company, said, “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company. Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.” 

 

Uday Shankar, co-founder, Bodhi Tree Systems, said, “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”