Post the completion of this transaction, the company’s equity stake in Viacom18 will increase to 70.49% (on a fully diluted basis).

THE ECONOMIC TIMES (March 15, 2024)

Paramount Global will exit Viacom18 by selling its remaining 13.01% stake to Reliance Industries for Rs. 4,286 crore, a deal that will value the Indian media company at about Rs. 33,000 crore.

In separate regulatory filings, the US media and entertainment major and the Mukesh Ambani-led Indian conglomerate have said the transaction is subject to the satisfaction of certain customary conditions, including receipt of applicable regulatory approvals.

The transaction is also subject to the completion of the proposed joint venture (JV) involving RIL, Viacom18, and The Walt Disney Company's Star India.

RIL's stake in Viacom18 will increase to 70.49% after the completion of the deal. It currently holds compulsorily convertible preference shares (CCPS), representing a 57.48% equity stake in Viacom18.

Former Star India chairman and CEO Uday Shankar's Bodhi Tree Systems holds around 16% stake in the company while the remaining stake of about 13.5% is held by TV18.

Paramount, which owns media brands like MTV, Vh1, and Nickelodeon, will continue to license its content to Viacom18. It has launched its streaming platform Paramount+ as a bundled service on Viacom18's streaming platform Jio Cinema.

Viacom18 is a subsidiary of TV18 Broadcast, which is in the process of merging with Network18.

Paramount Global (formerly Viacom), which had formed Viacom18 as an equal joint venture (JV) with TV18 in 2007, has been ceding control of the company to RIL after the latter's acquisition of Network18 from Raghav Bahl.

In 2018, RIL took control of Viacom18 by acquiring an additional 1% stake from Paramount for a cash consideration of $20 million to take its stake to 51%.

Paramount's stake in Viacom18 declined to 13.01% from 49% last year following a ₹15,145-crore fund infusion by RIL and Bodhi Tree Systems.

The fund infusion gave RIL-owned entities a 60.37% shareholding in Viacom 18, with Bodhi Tree Systems receiving 13.08%. Subsequently, Bodhi Tree hiked its stake in Viacom18 by purchasing an additional 2.89% stake from RIL for Rs. 953.23 crore.

Paramount Global had realised a non-cash gain of $168 million for the quarter ended June from the dilution of its stake in Viacom18, the company's regulatory filings show.

The stake acquisition by RIL comes close on the heels of the joint venture (JV) deal between RIL and Disney to merge Viacom18 into Star India, a company owned by the American media conglomerate.
--------------------------------------------
Buyout Follows Reliance’s Merger Deal With Disney India
Reeba Zachariah (THE TIMES OF INDIA; March 15, 2024)

Mumbai: Reliance Industries will buy out Nasdaqlisted Paramount Global’s stake in its Indian TV channel and streaming business for $517 million (Rs 4,286 crore), strengthening its play in the $28-billion media and entertainment sector.

The move comes a fortnight after Reliance decided to merge the business of Viacom18 with the India unit of Walt Disney. Reliance will buy Paramount’s entire 13% share in Viacom 18, increasing its stake to nearly 70.5% from about 57.5%.

The development highlights Reliance’s strategy of going beyond its mainstay business of refining and petrochemicals and upping its play in consumer-facing businesses. Towards this, it has been buying assets in retail, fashion and digital.

The deal will scale back the presence of Paramount, best known for owning entertainment assets like the eponymous Paramount Studios, CBS television net work, MTV, Comedy Central and Nickelodeon, in India, which it had entered more than two decades ago. It will, however, continue to license its content to Viacom18 after the deal is closed.

The transaction is subject to the completion of the Viacom18-Walt Disney India merger deal. The share-sale will help Paramount improve its balance sheet even though international media reports have deemed it as a potential takeover target.

In 2007, Viacom Inc (now part of Paramount) formed a 50:50 joint venture with TV18 India, a company then owned by Raghav Bahl, to establish Viacom18. This company launched Hindi entertainment channel Colors and managed Viacom’s TV channels like MTV, VH1 and Nickelodeon.

In 2014, TV18 India was taken over by Reliance and in 2023, Viacom 18 was combined with one of the entities of Reliance, making Paramount a smaller shareholder of the broadcaster. The 2023 transaction also saw Bodhi Tree Systems, an investment venture of James Murdoch’s Lupa Systems and former Walt Disney India head Uday Shankar, acquiring a 13.1% stake in Viacom18.

Once the businesses of Viacom18 and Walt Disney India are combined, Reliance will hold just over 16% in the merged entity, Viacom18 will own about 47% and Disney close to 37%. Like Paramount, Disney too will see its presence scaled back in India, one of largest economies in the world.

The Reliance-Disney combination will make the business environment difficult for smaller players like Zee and Sony as they will have to individually compete with a dominant player. Analysts expect the Reliance-Disney consolidation to benefit the unified entity as its bargaining power will increase, helping it to command better advertising rates. It could also see rationalization in content costs, leading to margin improvement, they said.

Zee and Sony had attempted to merge their local operations but the deal collapsed after Sony walked away from it. Had the merger happened, Zee-Sony would have been the largest player in the sector after Reliance-Disney.