Reliance-backed Viacom18 has reportedly struck a deal to purchase 60% of Disney’s India unit, as per a report by the Wall Street Journal. This move is set to pave the way for the creation of a $10 billion media powerhouse in the South Asian market, solidifying the Indian conglomerate’s position in the industry.
Key Takeaway
Reliance-backed Viacom18 is set to acquire a majority stake in Disney’s India unit, reshaping the media landscape in the South Asian market and signaling a significant shift in the competitive dynamics of the industry.
Agreement Details
According to the report, the agreement values Disney’s India unit at $3.9 billion, a figure significantly lower than Disney’s initial expectations. The deal is expected to be finalized this month. As part of the agreement, Disney will retain a 40% ownership stake in its India unit, while Reliance will acquire a 51% stake and Bodhi Tree will hold 9%.
Background and Implications
Viacom18, a joint venture involving Reliance Industries, Paramount Global, and Bodhi Tree Systems, is at the forefront of this acquisition. The move comes in the wake of Disney’s acquisition of 21st Century Fox’s entertainment assets for $71.3 billion in 2019, which included Star India. This acquisition granted Disney broadcast and streaming rights to the Indian Premier League cricket matches, a wide array of multilingual TV channels, and a stake in a Bollywood film production company.
Shift in Market Dynamics
While Disney’s Hotstar initially dominated the Indian video streaming landscape, the emergence of Reliance-backed Viacom18, particularly after securing the five-year rights to stream IPL cricket matches for approximately $3 billion, has altered the competitive landscape. Reliance has been actively bolstering JioCinema by attracting top talent and incorporating premium content from HBO and NBC into its on-demand streaming service.
Reunion and Investments
The merger with Viacom18 marks the reunion of former Star India CEO Uday Shankar and James Murdoch, who played pivotal roles in the growth of Star India. The formation of Bodhi Tree in 2021, backed by the Qatar Investment Authority, further underscores the evolving dynamics in the media and entertainment industry.
