JioMusic, Saavn to merge, create $1bn entity |
Reliance Industries (RIL) struck a deal to shore up content for its telecom business by merging its digital music company JioMusic with streaming service provider Saavn. The merger will create a $1-billion entity. The deal will benefit Reliance Jio, which would get access to a large library of music content. This transaction comes nearly a month after RIL had acquired a 5% stake in media firm Eros International. The companies said the integreted business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums.RIL said the combined entity is valued at over $1 billion, with JioMusic`s implied valuation at $670 million.RIL will invest up to $100 million in the new entity, of which $20 million will be invested upfront for growth and expansion of the platform. The company will continue to operate as an over-the-top (OTT) media platform, available in all app stores. The three co-founders of Saavn — Rishi Malhotra, Paramdeep Singh and Vinodh Bhat — will continue in their leadership roles and will drive growth of the combined entity. JioMusic will also acquire a partial stake from existing shareholders of Saavn for $104 million.
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