Reliance to acquire Paramount stake in Viacom18

Paramount Global has agreed the sale of its entire 13% stake in India’s Viacom18 to majority owner Reliance for approximately US$517 million.

In a regulatory note, Paramount said the sale was conditional on completion of the joint venture partnership between Reliance, Viacom18 and Star Disney.

Once the deal is closed, Paramount will continue to license content to Viacom18, it said.

Paramount’s sale of its stake follows the agreement between Reliance, Viacom18 and Disney to combine Viacom18 and Star India in a joint venture, with Reliance agreeing to invest US$1.4 billion into the venture to fuel growth.

The JV will be controlled by Reliance with a 16.34% share ,with Viacom18 holding 46.82% and Disney 36.84%.

Prime mover

Buying out Paramount further cements the position of Reliance boss Mukesh Ambani, who recently splashed out a reported US$120 million on a ‘pre-wedding party’ for his son Anant, as the prime mover in Indian TV. Apart from Reliance and Paramount, Viacom18’s other shareholder is Bodhi Tree Investments, the investment vehicle of James Murdoch and Uday Shankar.

The post-merger entity will hold an estimated 40% share of the Indian TV and streaming advertising business. Disney Star is India’s market leader in advertising revenues and subscribers but was deprived of Indian Premier League cricket digital rights last year by Reliance.

Viacom18’s likely dominance in the huge but challenging market was confirmed following Sony’s decision to call of a US$10 billion merger with Viacom18’s biggest competitor, Zee Entertainment, in January, amid concern about Zee’s financial performance and a refusal to countenance existing Zee CEO Punit Goenka staying on after the merger.

Ambani has sought in recent years to build his media and telecoms business to diversify Reliance, a vast conglomerate active in the energy sector.