RIL to Grabs 13.01% of Viacom18 from Paramount for $517M

On 14 March, Reliance Industries, India's largest private company informed to stock exchanges that it had entered a binding agreement to purchase Paramount Global's complete 13.01% stake in Viacom 18 Media for ₹4,286 crore equivalent to $517 million.

Deal Details

Paramount Global through its subsidiaries held this stake in Viacom18. Even after the deal Paramount will continue licensing its content to Viacom18. Notably, Paramount already streams its content through Reliance's JioCinema platform. Viacom18 is a subsidiary of TV18 Broadcast. Currently, TV18 holds a 57.48% stake in Viacom18. With this acquisition, TV18's ownership will increase to 70.49%. Viacom18 operates a total of 40 television channels among them are well-known channels such as Comedy Central, Nickelodeon and MTV.

This transaction is a part of Reliance's broader strategy in the media and entertainment space. It comes amid their ongoing merger discussions with Walt Disney for their India TV and streaming assets. Reliance aims to consolidate its position in India's rapidly growing entertainment market.

Paramount, the parent company of CBS, MTV and other major networks has been selling off assets, like its Simon & Schuster book publishing arm to ease its debt load. It's also considering a proposal from producer David Ellison to acquire the Redstone family’s controlling interest and merge his Skydance Media studio into Paramount. Analysts at Bloomberg estimate that selling Paramount's stake in Viacom18 could fetch up to $550 million providing a potential avenue to reduce the company's debt.

Reliance's Media Expansion

Mukesh Ambani, CMD of Reliance Industries and Asia’s wealthiest person is looking to strengthen his influence in the rapidly growing entertainment market. He's shifting Reliance from fossil fuels to consumer focused and technology driven ventures.

Recently, Reliance and Disney signed a deal to merge their Indian media operations. The merger, worth $8.5 billion will be predominantly owned by Reliance and its related companies while Disney will hold a smaller ownership stake. Disney's decision to merge with Reliance comes after facing challenges in retaining subscribers. Reliance shook up the sports broadcast industry by offering free streaming of IPL cricket matches in India, capitalizing on the country's huge cricket fan base.

Reliance Industries saw a boost in its stock value by more than 1% on Thursday morning trading. This surge was driven by the news that Paramount Global is selling its 13% stake in Reliance's Indian TV business. Day before, Reliance Industries faced a 2.6% drop in its stock price, closing at ₹2,873.20 this decline was in line with the broader market downturn. However, over the past year, Reliance's stock has gained 26%.

Final Words

Reliance's acquisition of Paramount's stake in Viacom18 marks a development in India's media landscape. It strengthens Reliance's foothold in the sector and highlights its ambitions in the rapidly evolving entertainment market.