The
Walt Disney Company has finally made an official announcement that it is acquiring a controlling stake in Ronnie Screwvala's
UTV Software Communications through a delisting offer as part of its efforts to expand in one of the world's fastest growing film and television markets.
Disney owned 50.2 per cent in UTV before this offer and will have spent about Rs 2,000 crore buying shares.
UTV will be renamed The Walt Disney Company India after a delisting offer between January 16 and 20 was successful at Rs 1,100 a share. Disney had earlier said it would pay Rs 835.03 to Rs 1,000 a share for the acquisition. It is understood that the acquirer has received "adequate shares" at or below Rs 1,100 and its stake will exceed 90 per cent of UTV's share capital if it accepts these shares --- a key condition for delisting a company's shares. Disney will start the process to delist UTV shares from local stock exchanges after February 6.
Screwvala, who will now be at the helm of Disney in India as its managing director, will make approximately Rs 800 to Rs 850 crore from the sale. He will report to Andy Bird, Chairman, Walt Disney International. Mahesh Samat, who was heading Indian operations of Disney, quit last week. It is understood that Natasha Malhotra who is currently the VP and GM Walt Disney Television could be reporting to M K Anand, CEO UTV Broadcasting. The future role of Zarina Mehta, who is currently the chief creative officer of UTV Broadcasting and is the wife of
Screwvala, is not clear.
With the acquisition, Disney will now have nine TV channels in its fold and a full-fledged Bollywood studio company through UTV Motion Pictures. The company will now produce both UTV and Disney-branded local films.
The UTV acquisition is a big move for Disney considering it is a late entrant into the competitive Indian market. When it entered India in 2004, the creator of the iconic Mickey Mouse had to battle a lack of interest in for Walt Disney content in the Indian market as well as keen competition from global rivals such as Viacom (which runs MTV and Nick channels), News Corp (Star), and Turner Broadcasting.
But the going continues to be tough for the California company. Disney India trails its rivals by revenues. Industry estimates put its broadcasting revenues in India for 2011 at roughly Rs 75 crore. It has managed to grab a share of kids television viewership but that segment is still dominated by Cartoon Network and Pogo channels belonging to Turner India. The only Disney business of some scale in India is its joint venture ESPN-Star Sports that has revenues of over Rs 500 crore.
Of its four main lines of businesses globally - media networks (television), studio entertainment (films), theme parks and resorts, and consumer products - Disney is focused on all but the parks and resorts business in India. Together with its investments in local film production, Disney is said to have pumped in close to half a billion dollars in India in the last two years or so.
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