Billionaire Mukesh Ambani-led Reliance Industries has announced that the company, through a subsidiary is acquiring a 5% stake Eros International, a NYSE (New York Stock Exchange) listed company, which is the holding company of India based media player Eros International. According to joint press release an overseas subsidiary of RIL will acquire Eros’ shares for $15 a piece, translating to a 18% premium from Monday’s closing price. Further, the two companies will invest up to Rs 1,000 crore each to produce and acquire Indian films and digital originals across all languages, said the press release. The joint statement release also said that current Eros CEO and MD Jyoti Deshpande will step down from her Executive role after serving for nearly 17 years and switch over to head the Media and Entertainment business at RIL. We take a look at the synergies behind the deal, and what it means for the companies.
Content play for Jio
The move will further enhance Reliance Jio’s content offerings, say experts. Notably, the move comes after RIL has purchased a 24.9% stake in Alt-Balaji, the subsidiary of Ekta Kapoor led- Balaji Telefilms, the television content producer headed by Ekta Kapoor. Recently, Balaji Telefilms said it has decided to make its digital content available on various content applications of Reliance Jio.
Eros banking on RJio’s reach
Eros International will look to further strngthen its position in India given Rjio’s reach. “I am very pleased that Eros is partnering with RIL in its entertainment journey with several synergies across technology, content and digital with Eros Now. We look forward to collaborating and growing as we continue to make new strides on the digital and content forefronts. I am confident that together, we can make a meaningful difference,” Kishore Lulla, executive chairman of Eros said.
RIL looks to consolidate position in Media and Entertainment industry
According to the statement, Jyoti Deshpande, who takes over the reins from April 1, 2018 will lead the company’s initiatives in Media and Entertainment in order to ‘build and grow businesses around’ the content ecosystem like Films, Sports, Broadcasting, Digital, Music, Animation, Gaming etc. Further, Jyoti Deshpande will also look to integrate the company’s current media investments such as Viacom and Balaji Telefilms with an aim to build, scale and consolidate the fragmented $20 billion Indian M&E sector.
Mukesh Ambani’s take
The chairman of India’s most valued company, Mukesh Ambani said, “We are pleased to join hands with Eros, as it will bring further synergies into our plans, making for a win-win partnership. We are delighted to welcome Jyoti Deshpande into the Reliance family and believe that she will not only give wings to our plans but also play a pivotal role in transforming the sector.”