Reliance Industries (RIL) on Thursday said that it it has entered into a binding agreement with Paramount Global to buy its entire 13.01% stake in Viacom 18 Media for ₹4,286 crore ($517 million). The transaction is subject to requisite regulatory approvals, as well as the completion of a recently announced joint venture involving Reliance, Viacom18, and Star Disney, RIL says in an exchange filing.
Following the announcement, shares of RIL opened flat at ₹2,865 against the previous closing price of ₹2,864.70 on the BSE. In the early trade, the country’s most valued stock rose as much as 1.1% to ₹2,897.35, while the market capitalisation climbed to ₹19.45 lakh crore. The Reliance shares touched its 52-week high of ₹3,024.80 on March 4, 2024, and its 52-week low of ₹2,012.14 on March 20, 2023.
“A binding agreement has been entered into today at 1:38 a.m. between the company and two subsidiaries of Paramount Global for the company to acquire 13.01% equity stake (on a fully diluted basis) of Viacom 18 Media Private held by Paramount Global through its two subsidiaries for an aggregate consideration of ₹4,286 crore,” RIL says in a BSE filing on March 14.
Viacom18 is a subsidiary of Reliance-owned TV18 Broadcast, which currently holds a 57.48% equity stake (on a fully diluted basis) in the company. Post the completion of this transaction, TV18 Broadcast’s equity stake in Viacom18 will increase to 70.49% (on a fully diluted basis).
“The acquisition is not a related party transaction and none of the Company’s promoter / promoter group / group companies have any interest in the acquisition,” the release notes.
After the closing of the deal, Paramount will continue to license its content to Viacom18, the American film and television production company says in an exchange filing in the U.S.
On February 28, 2024, RIL, Viacom18, and The Walt Disney Company signed the binding definitive agreements to form a joint venture (JV) that will combine the businesses of Viacom18 and Star India and will be valued at ₹70,352 crore. As part of the agreement, the media undertaking of Viacom18 will be merged into Star India Private Ltd (SIPL) through a court-approved scheme of arrangement.
Post completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney. Nita Ambani will be the chairperson of the JV, with Uday Shankar as vice-chairperson.
As per the deal, the JV will bring together assets like Colors, StarPlus, StarGOLD and Star Sports and Sports18, and access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.
In addition, RIL has agreed to invest at closing ₹11,500 crore into the JV for its growth strategy. The transaction values the JV at ₹70,352 crore ($ 8.5 billion) on a post-money basis, excluding synergies.
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