RIL to buy US co Paramount’s stake in Viacom18 for Rs 4.3k crore

Mar14,2024


Mumbai: Reliance Industries will buy Nasdaq-listed of great quality of global bet With $517 million (Rs 4,286 crore) in its Indian TV channel and streaming business, it strengthened its role in the $28 billion media and entertainment sector.
The move comes a fortnight after Reliance decided to merge the businesses. Viacom 18 With Walt Disney's India unit. Reliance will buy Paramount's entire 13% stake in Viacom 18, increasing its stake from about 57.5% to about 70.5%.
The development highlights Reliance's strategy to move beyond its core business of refining and petrochemicals and increase its role in consumer-facing businesses. Toward this end, it is buying assets in retail, fashion and digital.

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The deal will reduce the presence of Paramount, which is known for owning entertainment properties such as Paramount Studios, CBS Television Network, MTV, Comedy Central and Nickelodeon, in India, which it entered more than two decades ago. However, it will continue to license its content to Viacom18 even after the deal closes.
The transaction is subject to the completion of the Viacom18-Walt Disney India merger deal. The share-sale would help Paramount improve its balance sheet, even though international media reports have pegged it as a potential takeover target.
In 2007, Viacom Inc (now part of Paramount) formed a 50:50 joint venture with TV18 India, then owned by Raghav Bahl, to establish Viacom18. The company launched the Hindi entertainment channel Colors and manages Viacom's TV channels like MTV, VH1 and Nickelodeon.
In 2014, TV18 India was acquired by Reliance and in 2023, Viacom18 was merged with a unit of Reliance, making Paramount a minority shareholder of the broadcaster. In a 2023 transaction, James Murdoch's Lupa Systems and former Walt Disney India chief Uday Shankar's investment venture Bodhi Tree Systems acquired a 13.1% stake in Viacom18.
Once the businesses of Viacom18 and Walt Disney India are combined, Reliance's stake in the merged entity will be just over 16%, Viacom18 will hold about 47% and Disney will hold about 37%.
Like Paramount, Disney will also be expanding its presence in India, one of the world's largest economies.
The Reliance-Disney combination will make the business environment tough for smaller players like Zee and Sony as they will have to compete with a major player individually. Analysts expect the Reliance-Disney integration to benefit the combined entity as its bargaining power will increase, helping it capture better advertising rates. He said that this could also lead to rationalization of material costs, which would improve margins.
Zee and Sony had attempted to merge their local operations but the deal fell apart after Sony walked out. If the merger had happened, Zee-Sony would have been the largest company in this sector after Reliance-Disney.



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