Viacom18-sony merger deal likely by mid-august

THE MERGED ENTITY IS EXPECTED TO START OPS BY THE END OF 2021

NEW DELHI: A merger of Sony Pictures Networks and Viacom18 Media Pvt. Ltd is likely to be formally announced by mid-august, said three people familiar with the development.

The merged entity is, however, expected to start operations only by the end of 2021, the people said, requesting anonymity.

Viacom18 is a 51:49 joint venture between Reliance Industries Ltd (Ril)-owned Network18 and Us-based Viacom Inc. The likely merger has been in the works for a year-and-a-half and it is said that Sony will take a majority stake of 74% in Viacom, which will own the remaining 26%

The deal is aimed at providing Reliance greater control over India’s entertainment ecosystem and help it keep the content pipeline going for its distribution netmanage works of DEN and Hathway— both cable service providers— and its broadband and internet service Jio Fiber.

A spokesperson for Sony declined to comment while a spokesperson for Viacom did not respond to queries.

“It gives a lot more muscle to Reliance as a distribution-oriented company with this dedicated content pipeline behind them,” said one of the people cited above.

“Entertainment broadcast business is no longer core to RIL. Initially, when they had started assembling content business, it was meant for customer acquisition for Jio and increasing data usage. RIL has realised that it can this with commercial relationships without owning assets,” said an executive at a large audit and consulting company, declining to be named.

For Sony, the proposed merger with Viacom18 will help achieve a wider footprint in India’s entertainment space. Besides the Hindi general entertainment channel, Viacom owns regional language and children channels where Sony isn’t strong.

“Sony’s overall TV performance is seasonal. Its marquee TV shows like KBC come once a year,” a media analyst said on condition of anonymity.

“If Sony merges its India entertainment biz with Network18’s entertainment biz, the merged entity may have 18-20% market share in overall viewership and about 45% share in Hindi general entertainment channel space,” said the executive from the consulting company.