Reliance Industries continues its expansion strategy by acquiring Paramount Global’s entire 13.01% stake in Viacom 18 Media Private Limited. The deal, valued at approximately Rs. 4,286 crore (~$517 million), has been officially disclosed through a regulatory filing. It is noteworthy that following the completion of this transaction, Reliance’s stake in Viacom 18 will increase to 70.49% on a fully diluted basis, up from the existing 57.48%.
Currently, Paramount’s content is accessible for streaming on Reliance’s JioCinema platform. The company has expressed its dedication to maintaining its content licensing agreement with Viacom18 even after the completion of the deal.
It’s important to note that the acquisition of Paramount Global’s stake in Viacom 18 Media by Reliance Industries is not considered a related party transaction. This ensures fairness, as the involved parties, including Reliance’s promoters, promoter group, or affiliated companies, do not possess any special interests or connections that could unfairly influence the deal. However, regulatory approvals are necessary for the transaction’s completion.
Furthermore, the finalization of the transaction is contingent upon the execution of another significant deal between Reliance and Disney.
Reliance Ownership Structure
Viacom18 operates as a subsidiary of TV18 Broadcast, which is also a subsidiary of Network18 Group. Notably, Reliance Industries holds over 75% stake in the parent company, Network18.
In a significant move back in 2014, Reliance injected a substantial amount, up to Rs. 4,000 crore, into the Independent Media Trust (IMT). This strategic investment enabled Reliance to secure complete control over Network18 Media and TV18 Broadcast Ltd.
Reliance has been acutely aware of Viacom18’s relatively smaller stature compared to TV industry giants like Star, Zee, and Sony. Therefore, the company has been making efforts to either acquire or merge with these big players to establish India’s largest entertainment platform. This strategic pursuit began with Reliance’s efforts to expand through a merger with Sony Pictures Entertainment’s India unit. However, the proposed merger was called off in 2020 due to disagreements over shareholding and valuation.
Following the setback with Sony, Reliance turned its attention to merging Viacom18 with Zee. Although Invesco, Zee’s largest shareholder at the time, supported the idea and advocated for changes to the Zee board, the Zee promoters rejected Reliance’s offer. Subsequently, Zee pursued a deal with Sony, which also encountered difficulties and ultimately called off in January 2024 after two years of negotiations.
Despite the setbacks in dealing with the second and third largest players, Reliance achieved success in its third attempt by acquiring the market leader, Star India. The merger between Star and Viacom18, finalized on February 28, 2024, is poised to establish an $8.5 billion media powerhouse. This combined entity will hold a dominant presence in both television and digital segments, marking a significant milestone in Reliance’s strategic expansion within the media and entertainment industry.
In a strategic move to solidify its presence in the OTT streaming space, Reliance announced a significant merger with Walt Disney Co, resulting in the creation of a formidable entity valued at Rs 70,000 crore.
According to the agreement, Reliance and its affiliates will hold a majority stake of 63.16% in the merged company, which will feature two streaming services and 120 television channels. On the other hand, Disney will retain the remaining 36.84% of the entity.
As part of its commitment to bolstering the joint venture, Reliance has pledged to infuse Rs 11,500 crore upon the closure of the deal, propelling JioCinema to the forefront in the face of competitors like Amazon Prime Video and Netflix.
Reliance Industries’ relentless pursuit of expansion and strategic mergers underscores its commitment to solidifying its position as a dominant force in India’s media and entertainment landscape. With bold moves such as acquiring stakes in Viacom 18 and Star India and merging with Walt Disney Co., Reliance is poised to reshape the industry. Ultimately, Indian consumers will benefit the most by having a wide range of movies and TV shows all under one platform. However, the question arises: Does Reliance’s monopoly in the Indian media and entertainment industry serve the greater good?
