A newly-formed subsidiary of Reliance's Viacom18 will reportedly absorb Disney's Star India through a share swap deal in January.
Mukesh Ambani’s Reliance Industries Ltd (RIL) and Walt Disney Co. are reportedly in the process of finalising a non-binding term sheet for the merger of their media and entertainment operations in India.
A newly-formed subsidiary of Reliance’s Viacom18 will reportedly absorb Disney’s Star India through a share swap deal in January, as per the discussions.
The talks are on to finalise a business plan that involves an immediate capital investment of approximately $1-1.5 Bn. The ultimate shareholding structure and valuation of the entity will be determined based on the cash infusion from both Reliance and Disney.
The board is anticipated to have equal representation from Reliance and Disney, with a minimum of two directors each. Bodhi Tree, led by Uday Shankar and holding the second-largest stake in Viacom18 after Reliance at 15.97%, is expected to secure a seat on the board. Additionally, the inclusion of at least two independent directors is under consideration.
Before finalising the term sheet, both parties are expected to conduct crucial meetings. Following this, an accelerated timeline is anticipated for announcing the merger, with a potential target date as early as the end of January.
Once the term sheet is agreed upon and confirmatory due diligence is completed, the official valuation process will commence. Independent valuers will be involved in determining the valuation of the merged entity.
Source: Inc42
