Reliance-Disney JV to Create India's Largest Media Empire, Share Value to Ris

Reliance-Disney JV to Create India's Largest Media Empire

Reliance Industries Limited (RIL) has recently announced a strategic partnership with Walt Disney Co. to form Reliance-Disney a joint venture (JV) that is expected to be highly beneficial for RIL.

According to a report by Jefferies, the JV will combine RIL's Viacom18 with Disney's Star India, creating India's largest media empire.

This collaboration is expected to cover a wide range of media offerings, including television broadcasting, streaming services, movie production, and sports broadcasting. It is also expected to add Rs 40 per share to RIL's valuation.

What are the thoughts of analysts?

Jefferies analysts believe that the JV is in a strong position to dominate the country's cricket broadcasting rights, as it holds a significant 40% of the Indian advertising market share.

To fuel its growth strategy, Reliance Industries Limited will infuse an investment of Rs 11,500 crore ($1.4 billion) in the venture. Post-money, the venture is valued at Rs 70,352 crore ($8.5 billion).

However, the deal is still subject to regulatory approvals, shareholder consent, and other customary clearances, and is expected to be completed by late 2024 or early 2025.

As per the agreement, RIL will own a 16.34% stake in the JV, while its subsidiary Viacom18 will own 46.82%, and Disney will hold the remaining 36.84% stake.

The JV will be led by Nita Ambani, Chairperson of Reliance Industries. Additionally, former Walt Disney executive Uday Shankar will serve as Vice Chairperson. The board will have ten members, with five nominees from RIL, three from Disney, and two independent directors.

Conclusion

This partnership has significant implications for the Indian media landscape, as it offers viewers a wider range of content. Additionally, it could impact advertising revenue streams in the industry.

Reliance shares closed at Rs 2,915 in the previous trading session. The stock has gained over 12% so far this year, outperforming the benchmark Nifty, which has risen nearly 1% during the same period.