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NEW DELHI – The Walt Disney Co. announced Wednesday it will acquire, via a subsidiary, a controlling interest in Mumbai-based UTV, one of India’s leading media and entertainment companies.
While a joint statement did not specify the financial terms of the deal, Disney already owned 50.44 percent of publicly-listed UTV and last July, it made an offer of $454 million to acquire the balance stake to gain a controlling interest in the group.
“The acquisition will be completed through a successful delisting offer and will enable Disney to integrate UTV’s current operations,” the statement said. In addition, UTV CEO Ronnie Screwvala has been named managing director, The Walt Disney Co. India, reporting to Walt Disney International chairman Andy Bird.
Disney first acquired a 14.9 percent stake in UTV for about $15 million in 2006. Subsequently in 2008, Disney upped its stake to 32.1 percent for about $230 million, which also gave Disney a 15 percent stake (valued at about $30 million) in UTV’s broadcasting unit UTV Global Broadcasting Limited. Last year, Disney upped its stake to 50.44 percent in UTV, leaving co-founder Ronnie Screwvala and three other backers holding a 19.82 percent stake.
The gradual acquisition of UTV enhances Disney’s position here since the company first established its India subsidiary in 2004. Via that subsidiary, it runs a broadcasting venture, including the Disney Channel, character licensing and film production. In 2008, Disney co-produced its first Indian film with veteran Bollywood banner Yash Raj Films, animated feature Roadside Romeo.
In addition to being a major broadcaster running a variety of channels such as kids outlet Hungama and youth channel UTV Bindaas, UTV owns one of India’s leading studios — UTV Motion Pictures — which has produced major Bollywood titles including recent hit Delhi Belly while coproducing South Indian films such as 2011’s Muran.
“Increasing our brand presence and reach in key international markets is a cornerstone of our growth strategy. This acquisition expands our footprint significantly and allows us to more effectively build, monetize and brand multi-platform franchises, and deliver a rich library of content to the world’s second largest population,” said Bird. “We couldn’t be more pleased that Ronnie, with his vast experience and proven track record, will now run our operations in India. Under his leadership, we will be able to deliver more programming on more platforms to this considerable audience.”
As a result of this acquisition and building on UTV’s existing position in the industry, Disney is expected to be a major film studio here producing both UTV and Disney-branded local films.
Disney’s earlier acquisiton of UTV’s broadcasting division brought kids channel Hungama into its fold, boosting its presence in the kids television market where it already runs the Disney Channel and Disney XD.
As a leading broadcaster running six channels with distribution in 20 countries, UTV’s acquisition further boosts Disney’s position in television expanding its reach to over 100 million viewers weekly in households across India. Disney will also gain a significant presence in digital media with the addition of UTV’s mobile gaming company Indiagames.
“In combining the creative capabilities of each company we will integrate a large stable of vibrant brands and franchises in the branded entertainment space,” added Screwvala. “With the middle class expected to grow from 50 million to more than 500 million people by 2025, this market offers huge potential for us to deliver quality branded entertainment to consumers.”
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