Reliance-backed Viacom18 has reached a deal to buy 60 percent of Disney’s India unit, the WSJ reported on Thursday, citing unnamed sources, paving a path for the Indian conglomerate to form a media giant update $10 billion in the South Asian market.
The agreement, which says the WSJ will close this month, valuing Disney’s India unit at $3.9 billion, the report said, less than half of what Disney had originally hoped for. Earlier this week, Reliance declined to comment on its engagement with Disney.
Viacom18 is a joint venture between Mukesh Ambani’s Reliance Industries, Paramount Global and James Murdoch’s Bodhi Tree Systems. Under the deal, Disney will retain 40% ownership in its India unit, while Reliance will get a 51% stake and Bodhi Tree will hold 9%, the report said.
In 2019, Disney acquired the entertainment assets of 21st Century Fox for $71.3 billion, a move that was significantly boosted by the inclusion of Star India.
The deal was integral to Disney’s global streaming expansion, giving it broadcast and streaming rights to Indian Premier League cricket matches, several multilingual TV channels and interest in a Bollywood film production company. At the time of acquisition, Star’s Hotstar had amassed around 150 million monthly active users.
While Hotstar dominated India’s video streaming landscape for several more quarters, things have slowed down as Reliance-backed Viacom18 has grown in popularity after securing the five-year rights to stream IPL cricket matches for around $3 billion. Disney paid $3 billion for the same five-year rights, but to broadcast the content on television.
Reliance has brought in many top leaders and engineering talent to bolster JioCinema over the last year and has complemented the on-demand streaming service with premium content from HBO and NBC.
The merger with Viacom18 reunites Rupert Murdoch’s son James and former Star India CEO Uday Shankar with a business they spent years building. Murdoch helped develop Star India when he was chairman of its former parent Sky, then part of Fox. Shankar led Star India for a decade till 2020.
Shankar and Murdoch, who previously founded a fund called Lupa, launched Bodhi Tree in 2021 with $1.7 billion backing from the Qatar Investment Authority. Bodhi Tree initially agreed to invest $1.78 billion in Viacom18, but later reduced the size of the investment to about $528 million.
