It’s the best of both worlds: Bob Iger on Disney’s deal with Reliance
We get to have a chance of growing a business and lowering the risk of doing so, said Iger while speaking at an event recently
The Walt Disney’s joint venture (JV) with Reliance Industries is “kind of the best of both worlds” for the former, according to CEO Bob Iger.
“We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so,” said Bob Iger while speaking at the Morgan Stanley Technology, Media & Telecom Conference on March 5.
“We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox,” Iger said. “We’re one of the biggest media companies in India. But even though it’s the most populous country in the world and we felt we want to be there because of that, we also know that there are challenges in that market,” Iger noted.
“And we had an opportunity to align with Reliance, which is the company that has done very well there and one that we respect. And in doing so, we end up owning part of a bigger media company. And we believe that it should not only benefit us in terms of the bottom line but also derisk us there,” he added.
Reliance Industries and The Walt Disney on February 28 announced the signing of binding definitive agreements to form a JV that will combine the businesses of Viacom18 and Star India.
As part of the transaction, the media undertaking of Viacom18 will be merged into Star India Private Limited (“SIPL”) through a court-approved scheme of arrangement. In addition, RIL has agreed to invest at closing ₹11,500 crore (US$ 1.4 billion) into the JV for its growth strategy.
The transaction values the JV at ₹70,352 crore (US$ 8.5 billion) on a post-money basis, excluding synergies. Post completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney. Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals.
Nita M. Ambani will be the Chairperson of the JV, with Uday Shankar as Vice Chairperson providing strategic guidance to the JV. The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India.
