Reliance Industries, led by Mukesh Ambani, is set to acquire Paramount Global’s stake in its Indian TV business for over $500 million, solidifying Ambani’s control over India’s rapidly expanding media market following a significant deal with Disney.
Paramount disclosed in a regulatory filing that it has agreed to divest its 13% stake in Viacom18, a joint venture with Reliance, for Rs42.86 billion ($517 million). This move swiftly follows Disney’s agreement to merge its Indian operations with Reliance in an $8.5 billion transaction.
These deals have swiftly positioned Reliance as a dominant force in the Indian media landscape, which has captivated investors and analysts globally as the growing affluence of India’s 1.4 billion population enables greater consumption of TV and mobile video streaming.
Despite this growth potential, India has posed challenges for Hollywood studios, leading to Paramount, Disney, and other foreign media entities, such as Warner Bros., scaling back their presence in the country.
Hollywood studios have grappled with the high production costs versus relatively low revenue per user in India, resulting in losses that have raised concerns among shareholders.
Intense competition from local media conglomerates like Reliance has further complicated matters, prompting foreign studios to seek partnerships or exit the market entirely.
An anticipated merger between Sony and Indian group Zee to create a media powerhouse that could rival the new Reliance-Disney entity fell through earlier this year.
With the Paramount agreement, Reliance’s stake in Viacom18 will rise to 70%, while investors, including James Murdoch and Uday Shankar, will retain the remaining shares.
Viacom18 holds numerous TV channels and exclusive digital rights for streaming the popular Indian Premier League cricket tournament until 2027. Paramount affirmed that it would continue licensing its content to Viacom18.
Analysts at Elara Capital noted last month that the Reliance-Disney merger would grant the combined entity approximately 40% of India’s TV and streaming advertising market share.
Mukesh Ambani’s overarching strategy for Reliance, one of India’s largest conglomerates, has been to diversify beyond its core oil and gas refining assets into consumer-oriented digital ventures.
Reliance’s telecom arm, Jio, has emerged as India’s largest telecom provider over the past decade, leveraging affordable data services to fuel the growth of mobile video and digital services.
Reliance aims to expand its digital footprint, encompassing services ranging from e-commerce to home broadband. Viacom18 also operates JioCinema, a streaming platform, under its umbrella.
