Viacom's India Partner Network18 Acquired by Reliance Industries
Viacom's Indian partner, Network18, has been acquired by Reliance Industries Ltd for $680 million (40 billion rupees) via its affiliate Independent Media Trust. Diversified broadcasting and media entity Network18 and Viacom run equal joint venture Viacom18, whose broadcasting interests here include MTV India, Vh1 India, Comedy Central, Nick India and flagship Hindi entertainment channel Colors, among others. The joint venture's film banner Viacom18 Motion Pictures has had a string of hits in recent years, including sports biopic Bhaag Milkha Bhaag and edgy fare like Gangs of Wasseypur.
Network18 also has a joint venture with CNN for news outlet CNN-IBN and is partners with Comcast Corp. to run CNBC-TV18. The group's publishing division includes the Indian edition of Forbes magazine, while its digital affiliate runs an array of web portals and services.
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With annual revenues in excess of $66 billion and headed by India's richest tycoon, Mukesh Ambani, Mumbai-based RIL's varied interests include petroleum, energy, textiles, retail and telecom. Following a split of the Reliance empire founded by their late father Dhirubhai Ambani, Mukesh's younger brother Anil Ambani runs his own telecom-to-entertainment Reliance ADAG conglom, which is DreamWorks' partner and financier.
The Network18 acquisition is seen as a move by RIL to gain wide-ranging content for its upcoming 4G telecom network, in which the group has reportedly invested $11 billion to target India's 890 million mobile users, the second largest in the world after China.
“This acquisition will differentiate Reliance's 4G business by providing a unique amalgamation at the intersect of telecom, web and digital commerce via a suite of premier digital properties,” RIL said in a statement Thursday announcing the acquisition while signaling its return in the telecom space following a split of the Reliance empire a decade ago.
RIL's Independent Media Trust will control 73.1 percent of Network 18 Media & Investments Ltd. (NETM) and 55 percent of TV18 Broadcast Ltd. (TV18), the company said in a filing with the Bombay Stock Exchange. RIL will also make an open offer for shares of Network 18 at 41.04 rupees each, totaling about 9.44 billion rupees, the company added. Network18 shares jumped about 17 percent in early trading Friday.
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Network18 was co-founded by its current chairman and TV presenter Raghav Bahl in the early 1990s in New Delhi as a television content producer before launching its own networks. In recent years, the Mumbai-headquartered group was reportedly looking for funding, given it was facing a cash crunch as reflected in its financial results: For the quarter ending 31 March, Network18 posted a $3.3 million (195.7 million rupee) loss, which had widened from a loss of 159.6 million rupees in the same period a year earlier.
RIL's buyout of Network18 happened in stages starting in 2012 by partly funding -- for an undisclosed amount -- the media group's acquisition of a South Indian regional network.
Meanwhile, the RIL acquisition has apparently sparked a management restructuring with reports suggesting some senior executives have resigned from Network18, including the group's long-time CEO B. Sai Kumar and chief financial officer R.D.S Bawa. Unconfirmed rumors suggest more heads may roll, which could include high-profile TV journalist and CNN-IBN editor Rajdeep Sardesai, who has a minority stake in the news network.
Network18 announced Friday that Bahl and his wife Ritu Kapur have exited their shareholding in the company. “We are delighted to welcome Mukesh Ambani and RIL as the potential owners of Network18,” said a joint statement from the couple to employees. “Believe us, the group is in terrific hands. Ambani is a visionary and truly good human being. And we have no doubt that Network18 would soar into the “cloud” under this dispensation. All of you have very good cause to be excited and optimistic about the future."