Mint Explainer: All you need to know about the $8.5-bn Disney-Reliance merger

livemint.com:

₹70,000 crore) media behemoth with more than 100 linear TV channels, two large streaming services – Disney+Hotstar and JioCinema – and a massive content library. As part of the deal, Disney will transfer all its India assets and employees — except its 30% stake in direct-to-home (DTH) company Tata Play, its consumer products business, and VFX studio Industrial Light & Magic (ILM) — to its wholly owned subsidiary Star India. Viacom18, a Reliance-controlled entity in which Paramount (earlier ViacomCBS) has a minority stake of around 13%, will merge with Star India to form a ₹58,852 crore (pre-money) joint venture.

Once the deal goes through, Reliance Industries will infuse another ₹11,500 crore ($1.4 billion) of growth capital into the JV for a 16.34% direct stake, valuing the JV at ₹70,352 crore. Viacom18, which posted a revenue of ₹4,554 crore in FY23, will be valued at ₹32,937 crore ($3.9 billion) in the JV, while Star India, which reported a revenue of ₹19,857 crore in the same year, will be valued at ₹25,915 crore ($3.12 billion) before Reliance’s investment. Bodhi Tree, a joint venture between Disney APAC CEO Uday Shankar and James Murdoch’s Lupa Systems, owns 15.97% in Viacom18.

This will be diluted to around 7.5% once Reliance infuses ₹11,500 crore in the JV, while Paramount’s stake will be diluted to 6.1%. People with direct knowledge of the deal said Paramount is likely to exit the JV by selling its stake to Reliance. As of now, Reliance will effectively control the JV.

It will have a direct stake of 16.34% in the company, while Viacom18 will have 46.82%. Disney will own 36.84% of the JV. Viacom18 is itself a step-down subsidiary of Reliance Industries.