Under the terms of the binding definitive agreements signed by the parties, the media undertaking of Reliance Industries-backed Viacom18 will be merged into Walt Disney’s Indian unit Star India via a court-approved scheme of arrangement
Reliance Industries and Disney to form $8.5bn JV to combine their respective digital streaming and television assets in India. (Credit: Gerd Altmann from Pixabay)
Reliance Industries (RIL) and Walt Disney have agreed to form a $8.5bn joint venture (JV) to combine their respective digital streaming and television assets in India.
Under the terms of the binding definitive agreements signed by the parties, the media undertaking of Reliance Industries-backed Viacom18 will be merged into Walt Disney’s Indian unit, Star India, via a court-approved scheme of arrangement.
In line with the transaction, Reliance Industries will invest approximately $1.4bn into the JV for its growth strategy at the closing of the deal.
Following the completion of the deal, the proposed JV will be controlled by Reliance Industries. The latter will hold a 16.34% stake in the JV, while Viacom18 and Walt Disney will own 46.82% and 36.84% interests, respectively.
Reliance Industries chairman and managing director Mukesh Ambani said: “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.”
Walt Disney intends to contribute certain additional media assets to the JV, contingent upon regulatory and third-party approvals.
According to Reliance Industries and Walt Disney, the new JV will become a leading TV and digital streaming platform for entertainment and sports content in the country.
The JV is expected to bring access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.
Besides, the parties stated that the JV will have more than 750 million viewers across India and will also serve the Indian diaspora across the globe.
Furthermore, the JV will have exclusive rights to distribute Disney films and productions in India, with a licence to over 30,000 Disney content assets.
Walt Disney CEO Bob Iger said: “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.”
Subject to regulatory, shareholder, and other customary approvals, the deal is expected to be completed in Q4 2024 or Q1 2025.
Goldman Sachs is providing financial and valuation advisory services, while Skadden, Arps, Slate, Meagher & Flom, Khaitan & Co, and Shardul Amarchand Mangaldas & Co are offering legal counsel to Reliance Industries and Viacom18 for the transaction.
Ernst & Young has conducted an independent valuation for Reliance Industries and Viacom18, and HSBC India, acting as financial adviser, has issued a Fairness Opinion to Viacom18.
Raine Group is serving as the primary financial adviser to Walt Disney, with Citi providing additional financial advisory services.
Cleary Gottlieb is the principal outside counsel to Disney, supported by Covington & Burling and AZB as legal counsels for the transaction. BDO has conducted an independent valuation for Star India.