Reliance-backed Viacom18 agrees to buy 60% of Disney’s India unit, report says

Reliance-backed Viacom18 has struck a deal to buy 60% of Disney’s India unit, paving the way for the Indian conglomerate to create a $10 billion media giant in the South Asian market, WSJ reported on Thursday, citing unnamed sources. It is done.

The deal, which WSJ says will close this month, values ​​Disney’s India unit at $3.9 billion, less than half of what Disney had originally expected, the report said . Earlier this week, Reliance declined to comment on its association with Disney.

Viacom18 is a joint venture between Mukesh Ambani’s Reliance Industries, Paramount Global and James Murdoch’s Bodhi Tree Systems. As per the agreement, Disney will retain 40% ownership in its India unit, while Reliance will acquire a 51% stake and Bodhi Tree will hold a 9% stake, the report said.

In 2019, Disney acquired the entertainment assets of 21st Century Fox for $71.3 billion, a move significantly strengthened by the addition of Star India.

The deal was integral to Disney’s global streaming expansion, giving it interests in broadcast and streaming rights to Indian Premier League cricket matches, several multilingual TV channels, and a Bollywood film production company. At the time of the acquisition, Star’s Hotstar had approximately 150 million monthly active users.

While Hotstar dominated the Indian video streaming landscape for several quarters, things have since declined as the popularity of Reliance-backed Viacom18 has waned after it acquired five-year rights to stream IPL cricket matches for around $3 billion. Has increased. Disney paid $3 billion for the same five-year rights, but to broadcast content on TV.

Reliance has brought on board a number of top leaders and engineering talent over the past year to grow JioCinema, and populate the on-demand streaming service with premium content from HBO and NBC.

The merger with Viacom18 has reunited Rupert Murdoch’s son James and former Star India CEO Uday Shankar with a business they spent years building. Murdoch helped grow Star India when he was chairman of its former parent company Sky, which was then part of Fox. Shankar led Star India for a decade until 2020.

Shankar and Murdoch, who previously launched a fund called Lupa, formed Bodhi Tree in 2021 with backing of $1.7 billion from the Qatar Investment Authority. Bodhi Tree initially agreed to invest $1.78 billion in Viacom18, but later reduced the size of the investment to approximately $528 million.