Paramount Discussing Sale of Share in India’s Viacom18 as Acquisition Rumors Continue to Swirl
Paramount has engaged in sale discussions with Reliance Industries Ltd., which also purchased a majority of Disney’s Star operations this year.
Reliance Industries Ltd. is continuing its wheeling and dealing. A new report from Bloomberg indicates that Paramount has opened discussions with the Indian media conglomerate regarding its 13% stake in Viacom18, an Indian media joint venture. If the deal closes, it would increase the clout of Reliance, which is already one of India’s top media firms.
- Paramount could garner as much as $550 million from the sale of its stake in Viacom18.
- Reliance purchased a majority stake in Disney’s Star operations earlier this year.
- The move is Paramount’s latest effort to cut costs ahead of possibly being acquired.
Bloomberg’s report indicates that no deal is in place between Paramount and Reliance as of yet, and talks could still fall apart. However, if the negotiations do lead to an agreement, Paramount could fetch as much as $550 million for its 13% stake in Viacom18, which is also owned by TV18 (whose parent company is Reliance) and Bohdi Tree Systems.
Grabbing Paramount’s stake in Viacom18 would give Reliance even greater control over the broadest company. Viacom18 holds some of the most popular sports rights in all of India, as in 2022 it won control of the streaming rights to Indian Premier League cricket. The loss of IPL cricket rights led to a downward spiral for Disney in India from which it never recovered.
Indeed, Disney ended up selling a majority stake in its Indian Star operations, which includes its streaming service Disney+ Hotstar to Reliance at the beginning of 2024. Disney took a bit of a bath on the transaction, netting $3.9 billion for 60% of a company that was valued at between $7 and $16 billion when Disney bought it in 2019.
What is Paramount’s Goal in Attempting to Sell its Stake in Viacom18?
There are two reasons why Paramount might be trying to sell off its 13% of Viacom18. The first would be to make it more attractive to potential merger partners; Paramount Global has been on the market since at least October of 2023, and has drawn interest from Warner Bros. Discovery,Skydance Media and Byron Allen of Allen Media Group. WBD has since pulled out of negotiations, but other interested parties remain.
A sale of its share of Viacom18 could be seen as a fat-trimming exercise by Paramount, in order to make it more palatable for prospective buyers. In moves that could also be intended to further that goal, Paramount recently laid off hundreds of employees and sold various pieces of real estate, and will reportedly shut down its kids streaming platform Noggin in the coming months.
On the other hand, Paramount could be trying to slim down on its international operations to make it easier to continue on without being acquired by another company. Speaking with analysts at this week’s Morgan Stanley Technology, Media and Telecom conference, Paramount Global CFO Naveen Chopra said that while the company was keeping its ears open to opportunities, it wanted to try and execute its strategy for surviving on its own before moving forward with any merger talks.
Whatever the motivations, it’s apparent that Paramount wants to keep removing items from its balance sheet if possible. The company has made no headway in its efforts to sell BET, and now it appears it has turned its efforts to sell off its stake of Viacom18 to India’s Reliance Industries Ltd.
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