Reliance to acquire Paramount's stake in Viacom18 for $517 mn

In a significant development, Reliance, the entertainment firm, has announced its acquisition of Paramount's 13% stake in Viacom18, a player in the Indian media venture. The deal, valued at $517 million, marks a strategic move by the company to bolster its presence in the rapidly evolving media landscape of the country.

Paramount Global, the US film and television giant, revealed its decision to sell its entire stake in Viacom18 to Reliance, as per filings with the Securities and Exchange Commission (SEC), a regulatory body in the United States. 

The completion of the transaction is contingent upon regulatory approval, as well as the finalization of a transaction announced earlier in February between Reliance, Viacom18, and Disney, as indicated by Paramount. Last month, Disney and Reliance unveiled plans to merge their respective Indian media businesses, envisioning the creation of an $8.5 billion entertainment behemoth in one of the world's most populous nations.

Under the proposed merger, Disney will integrate its Indian television subsidiary with Viacom18, with Reliance steering this joint venture. The ownership structure will see Disney holding a 36.8% stake, Reliance with 16.3%, and Viacom18 with 46.8%. Notably, Viacom18 operates as a subsidiary of TV18, a company owned by Reliance.

With a majority stake, the company is poised to leverage its vast resources and expertise to drive innovation and expand its reach across diverse media platforms.

Disney's strategic collaboration with Reliance comes amid its challenges in navigating India's vast and competitive media market independently. By joining forces with Reliance, it aims to enhance its market presence and fend off competition from traditional rivals like Zee Entertainment and Sony, and streaming giants such as Amazon and Netflix.

According to documents submitted by Reliance to the National Stock Exchange of India, the acquisition will elevate Reliance's stake in Viacom18 to just over 70%. Moreover, Paramount will continue to license content to Viacom18, ensuring continuity and stability in the partnership.