Reliance acquires Paramount's stake in Indian TV business for $500 million

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Mukesh Ambani's Reliance Industries will buy Paramount Global's stake in India's TV business for more than $500 million, the tycoon said in a deal with Disney Multi-billion dollar deal to tighten control over India's fast-growing media market.

Paramount said in a regulatory filing that it has agreed to sell a 13% stake in Viacom18, its joint venture with Reliance, for 4,286 crore rupees ($517 million). Just two weeks ago, Disney agreed to merge its India operations with Reliance in an $8.5 billion deal.

The deals have made Reliance a dominant force in India's media market in just a few weeks, a market that has investors and analysts around the world excited as rising incomes in the country of 1.4 billion people turn to television and Streaming mobile video.

Yet India has proven a difficult market for Hollywood studios, with Paramount and Disney joining other foreign media conglomerates such as Warner Bros. in scaling back their presence in the country.

Despite its huge growth, Hollywood studios have struggled to balance the high costs of content production with low levels of user revenue in India, resulting in losses that worry shareholders eager to rein in their cash burn. Foreign film companies also face stiff competition from local media groups such as Reliance Group, prompting them to form joint ventures or pull out altogether.

A deal between Sony and India's Zee Group to create a media giant to rival the newly formed Reliance Disney entity fell apart this year.

The deal with Paramount will increase Reliance's stake in Viacom18 to 70%, with the remainder owned by James Murdoch and former Disney India executive Uday Shankar, among others Investors hold.

Viacom18 owns dozens of TV channels and has the digital rights to broadcast the popular Indian Premier League cricket until 2027. Paramount said in a statement that it will continue to license its content to Viacom18.

Analysts at Elara Capital said last month that the merger of Reliance and Disney would give the new group about 40% of India's TV and streaming advertising market.

Ambani's long-term strategy is to diversify Reliance Group, one of India's largest conglomerates, beyond its core assets of oil and gas refining into consumer-facing digital businesses.

Ambani's telecom unit Jio has become the country's largest telecom company over the past decade by offering cheap data, driving growth in mobile video and other digital services, an area in which Reliance is trying to expand. These services range from e-commerce to home broadband. Viacom18 also owns streaming platform JioCinema.