Disney and India’s Reliance Industries have completed an $8.5 billion merger of Star India and Viacom18.
The joint venture, which was approved by regulators in India, the European Union, China, Turkey, South Korea and Ukraine, will be one of the largest media and entertainment companies in the country with combined revenue of approximately $3.1 billion for the fiscal year ending in March 2024 and a portfolio of sports rights across cricket, football and other sports.
It will operate over 100 TV channels and produce more than 30,000 hours of TV entertainment content annually. The JV includes JioCinema and Hotstar, which have an aggregate subscriber base of over 50 million.
The venture includes a $1.4 billion investment from Reliance for its growth and has allotted shares to Viacom18 and Reliance as consideration for the assets and cash, respectively. It will be controlled by Reliance, who will have an ownership stake of 16.34%. Viacom18 will own a 46.82% stake and Disney will own a 36.84% stake.
The deal comes after Disney began exploring options for Star India in July 2023.The company acquired the asset in the $71.3 billion acquisition of 21st Century Fox’s entertainment assets in 2019.
“This is an exciting moment for our two companies, as well as for India’s consumers, as we create one of the top entertainment entities in the country through this joint venture,” Disney CEO Bob Iger said in a statement. “By joining forces with Reliance, we are able to expand our presence in this important media market and deliver viewers an even more robust portfolio of entertainment, sports content, and digital services.”
Reliance Industries is India’s largest private sector company, with a business that spans hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, advanced materials and composites, renewables (solar and hydrogen), retail and digital service. In the fiscal year ending March 31, 2024, Reliance reported $120 billion in revenue, a cash profit $17 billion and net profit of $9.5 billion. Disney’s annual revenue for the 2023 financial year was $88.9 billion.
“With the formation of this JV, the Indian media and entertainment industry is entering a transformational era,” Reliance Industries chairman and managing director Mukesh Ambani added. “Our deep creative expertise and relationship with Disney, along with our unmatched understanding of the Indian consumer will ensure unparalleled content choices at affordable prices for Indian viewers. I am very excited about the JV’s future and wish it all the success.”
During its fourth quarter of 2024, Disney recorded $1.54 billion in restructuring and impairment charges, including $210 million on Star India. In fiscal 2025, it expects an adverse impact of $636 million related to the India business.
The joint venture will be led three CEOs: Kevin Vaz, who will lead entertainment; Kiran Mani, who will lead digital; and Sanjog Gupta, who will lead sports. Nita Ambani will serve as the JV’s chair, while Bodhi Tree Systems co-founder Uday Shankar provided strategic guidance as vice chair.
“James [Murdoch] and I are excited to be partners in this journey to disrupt the media and entertainment industry in India. The new organisation is committed to deliver an unprecedented level of creativity, disruption and new age consumer experience,” Shankar said. “As media consumption continues to move to an integrated TV-digital ecosystem, the merger of Viacom18 and Star India offers a unique opportunity to reorient the industry to better serve diverse cohorts of consumers across the country. Together, we aim to build India’s largest integrated media platform which will deliver unparalleled experiences in innovative and exciting ways.”
The completion of the $8.5 billion merger with Disney comes after Reliance bought out Paramount Global’s 13% equity stake in Viacom18 for $508 million. As a result, Reliance holds a 70.49% stake in the media company, while Bodhi ownsa 15.97% stake and Nework18 Media & Investments Ltd. owns a 13.54% stake. Paramount expects the sale will produce net proceeds of $456 million.
“Optimizing our asset mix is an important pillar of our strategic plan. “The sale of our Viacom 18 stake to Reliance provides an attractive financial return, is helpful to our balance sheet and improves leverage,” Paramount said in a statement. “We also look forward to the continuation of our licensing agreement with Viacom 18 as we monetize Paramount’s world-class content globally.”
