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Reliance-Disney Joint Venture: A Breakdown of Strategic Moves and Ownership Structure

On November 14, 2024, Reliance Industries Limited and Disney finalized their joint venture, Star India Private Limited (SIPL), merging two major forces in India’s entertainment landscape. Here’s a closer look at the key financial transactions and the resulting ownership dynamics:

Reliance’s Strategic Moves

  1. Sale of FSDL Stake

    • Reliance sold its 65% stake in Football Sports Development Limited (FSDL) to Viacom18, a Network18 Media & Investments Limited subsidiary, for ₹94.54 crore.
    • Despite the sale, Reliance retained operational control of FSDL.
  2. Acquisition of STPL

    • Reliance acquired a 63.16% stake in Star Television Productions Limited (STPL) from Disney for ₹211.59 crore.
    • STPL, registered in the British Virgin Islands, owns valuable intellectual property, including the “STAR” and “HOTSTAR” trademarks.
    • A proposed merger of STPL into SIPL is under review by the National Company Law Tribunal (NCLT), Mumbai. Once approved, SIPL will hold these trademarks, and Reliance will receive shares in SIPL.
  3. Stake Expansion in Viacom18

    • Reliance purchased 13.01% of Viacom18 from Paramount Global for ₹4,286 crore, increasing its total shareholding to 70.49%.
  4. Direct Investment in SIPL

    • Reliance invested ₹11,500 crore in SIPL, acquiring 26,05,19,406 equity shares in return.

SIPL Ownership Structure

After completing these transactions and implementing a composite scheme of arrangement involving Viacom18, Digital18 Media Limited, and SIPL, the final ownership of SIPL stands as follows:

  • Reliance: 16.34%
  • Viacom18: 46.82%
  • Disney: 36.84%

Despite not holding a majority stake, Reliance maintains control over SIPL.

Key Insights

  • Securing Intellectual Property: The acquisition of STPL positions SIPL as the owner of valuable trademarks, strengthening its brand portfolio.
  • Media Dominance: By increasing its stake in Viacom18, Reliance has fortified its leadership in the Indian media space.
  • Complex Deal Structure: The joint venture’s formation involved multiple strategic transactions, including stake divestitures, acquisitions, and corporate restructuring.

While the detailed transactions provide clarity on ownership and financial stakes, the long-term strategic objectives and anticipated benefits of this partnership for Reliance and Disney remain undisclosed.

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