Stake sale in Viacom18 an attractive opportunity yielding high ROI: Paramount Global CFO Naveen Chopra

Delhi: During the Q1 earnings call, Paramount Global CFO Naveen Chopra highlighted that the sale of its 13% stake in Viacom18 to Reliance offered the company an attractive opportunity to exit its ownership position with a strong return on investment.

He said, “Selling our stake in Viacom18 provided an opportunity to exit our ownership position with an attractive financial return on our investment while preserving our ability to monetise our content in India through an ongoing licensing arrangement.”

Last month, Paramount Global entered into an agreement with Reliance Industries to sell its equity interest in Viacom18 for approximately $500 million, based on current exchange rates.

Reliance was already a majority owner of Viacom18. 

Paramount, the owner of media brands such as MTV, Vh1, and Nickelodeon, will maintain its content licensing arrangement with Viacom18. Additionally, Paramount has introduced its streaming platform Paramount+ as part of a bundled service on Viacom18's streaming platform JioCinema.

Chopra further said that the after-tax proceeds will further benefit leverage when the transaction closes at the end of 2024, or early in 2025, subject to regulatory approval. 

The completion of the RIL-Paramount transaction is contingent upon the finalisation of the merger agreement involving RIL, Walt Disney's Star India, and Viacom18.

On February 28, 2024, The Walt Disney Company sold its India business to Mukesh Ambani’s Reliance Industries at a $3.5 billion valuation, which it bought from Rupert Murdoch for $14 billion seven years ago.

Paramount Global (formerly Viacom), which established Viacom18 as an equal joint venture (JV) with TV18 in 2007, has gradually relinquished control of the company to RIL following RIL's acquisition of Network18 from Raghav Bahl.

In 2018, RIL assumed control of Viacom18 by acquiring an additional 1% stake from Paramount for $20 million in cash, increasing its stake to 51%.

Paramount's ownership stake in Viacom18 decreased to 13.01% from 49% the previous year due to a Rs 15,145-crore capital infusion by RIL and Bodhi Tree Systems.