Viacom18-RILDisney JV to Increase Reliance’s Value by Rs 40 per share:Jefferies

Viacom18-RILDisney JV to Increase Reliance's Value by Rs 40 per share:Jefferies

In order to combine their streaming and television businesses in India, Reliance Industries Ltd. (RIL) and Walt Disney have established a joint venture. This will result in a massive company valued at Rs 70,352 crore.
On February 29, Reliance shares could rise as a result of the company and Walt Disney Co. entering into a strategic joint venture to combine their media businesses, Viacom18 and Star India. According to Jefferies, the RIL-Viacom18-Disney deal will raise RIL’s sum-of-the-parts valuation (SOTP) by Rs 40 per share.

According to the brokerage, this relationship not only offers chances for improved ad inventory monetisation, but it also holds out the possibility of content cost savings because of less competition.
With the help of the RIL-Viacom18-Disney JV, India will have the biggest media empire in the country, covering movies, sports, TV broadcasting, and streaming. The joint venture is expected to gain the most lucrative cricketing rights in India, solidifying its position as the market leader with a significant 40% share in advertising, according to Jefferies analysts.
“Disney’s business valuation, often overestimated in media reports, is substantially lower than perceived, adding an estimated Rs 40 per share to RIL’s SOTP,” stated Jefferies.

As part of its expansion plan, RIL has committed to investing a total of Rs 11,500 crore ($1.4 billion) in the JV. After deducting synergies, the transaction values the JV at Rs 70,352 crore ($8.5 billion) on a post-money basis. The JV is anticipated to be formed in the last quarter of 2024 or the first quarter of 2025, pending regulatory, shareholder, and other customary clearances.
After it is finished, RIL will control the JV, with 16.34 percent owned by the company, 46.82 percent by its subsidiary Viacom18, and 36.84 percent by Disney. The JV’s vice-chairperson is Uday Shankar, a former Walt Disney executive, and its chairperson is Nita Ambani.

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