RIL Acquires Majority Stake in Network18
RIL Channels the Power of the Media: Acquires Majority Stake in Network18
In what is the biggest deal in the media sector in India, Reliance Industries Limited has acquired a majority stake in Network 18 Media and Investments Limited along with its subsidiary TV 18 Broadcast Ltd for a massive sum of 4,000 crore.
The RIL Board has approved funding of up to 4,000 crore to Independent Media Trust for acquisition of control in Network18 Media and Investment Ltd including its subsidiary TV 18. Reliance Industry Limited is the sole beneficiary of IMT.
The funding also includes open offers to be made following the acquisition. Independent Media Trust will utilise funds to gain controlling stake of NW18 and TV18 which resulted in the ownership of around 78% in the former and 9% in the latter. It will also acquire shares tendered in open offers.
NW18 is currently the owner of an entire suite of elite digital internet properties and e-commerce companies along with differentiated broadcast content. This includes IBNLive.com, Moneycontrol.com, Firstpost.com, Homeshop18.com, Bookmyshow.com and In.com. The broadcast channels under NW18 include CNNIBN, IBN7, CNBC-TV18 and CNBC Awaaz. This acquisition is expected to differentiate Reliance's 4G business through an unique amalgamation of the conjunction of web, telecom and digital commerce through digital properties, according to RIL.
It was at the start of 2012 that NW18 and RIL had partnered for a multi-layered deal to ensure Reliance would get content access and distribution assets of Network18 after the former sold part of its interest in ETV channels. The NW18 group was led by Raghav Bahl. It is now indicated by media reports that NW18 promoter Bahl along with spouse Ritu Kapur resigned from the company after the resignations of Group CEO B. Sai Kumar, COO Ajay Chacko and CFO R. D. Bawa. Following the acquisition of NW18, IMT will make an open offer to the public shareholders for purchasing equity shares of the 2 companies and another subsidiary Infomedia Press Ltd.
RIL is currently the largest private sector company in the nation. It has revenues of over 4 lakh crores and cash profits of around 31,000 crore. NW18 is a behemoth in the field of e-commerce, publishing, mobile content, films and broadcasting as well as allied businesses.
TV18 Broadcast also has a joint venture with US based Viacom 18 which offers entertainment channels such as MTV, Nick Jr, Comedy Central, Colors and Viacom18 Motion Pictures. With media acquiring a signficant part in the world order, the power of the press is huge.
With its latest acquisition of a controlling stake in NW18, RIL has taken a rapid stride into the field of media, entertainment and publishing. It is through such innovations that the corporate group can encash on the heightened consumerism in this sector.
E-commerce is also another field which is really doing well and with this recent acquisition of a majority stake in Network18, RIL has aimed at this profit making sector. At the end of the day, any business is judged by shareholders on the basis of the profits it makes. With NW18, Reliance Industries Limited has picked a winner.
