In a move to strengthen its position in the content space, Reliance Industries Limited (RIL), the parent company of Reliance Jio, through a subsidiary has agreed to subscribe to a 5% equity stake in Eros at a price of USD 15 per share. This represents an 18% premium to last closing price, and the transaction is subject to customary regulatory and other approvals. Furthermore, RIL and Eros India announced that they have agreed to partner in the country to jointly produce and consolidate content from across India. Both the parties will equally invest up to Rs 1,000 crores (approx. USD 150 million) to produce and acquire Indian films and digital originals across all languages. Last month, Reliance Jio renewed its content deal with Eros Now and at the moment, Jio is offering free content from Eros Now on its JioCinema application.
At the same time, both the parties announced that Ms Jyoti Deshpande, Group CEO and MD of Eros would be stepping down from her Executive role after more than 17 years in Eros and move on to head the Media and Entertainment business at RIL as President of the Chairman’s Office. Also, Ms Deshpande will start her role at RIL from April 2018 but will continue to remain as a Non-Executive Director on the Board of Eros. “Mr Kishore Lulla will resume his position of Group Chairman and CEO of Eros,” read a media statement from Reliance Jio.
Also, in her new role, Deshpande will lead RIL’s initiatives in Media and Entertainment to organically build and grow businesses around the content ecosystem such as broadcasting, films, sports, music, digital, gaming, animation etc, as well as integrate RIL’s existing media investments such as Viacom and Balaji Telefilms with a view to build, scale and consolidate the fragmented USD 20 billion Indian M&E sector.
Shri Mukesh Ambani, Chairman & Managing Director, RIL commented, “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 Ms 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.”
This is one of the massive developments coming from Reliance Industries. Mukesh Ambani’s venture will now heavily focus on the content part and may also bundle the content free for its sister company Jio subscribers. This move from Jio will come as a heavy blow to Bharti Airtel, which in recent times has been aggressive in the content game.