RelinceJio Music to merge with Savan
24 March 2018
Billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL) has entered into agreement to merge its subsidiary JioMusic with New York-based over-the-top music platform Saavn to create a $1-billion music streaming entity.
The combined entity is valued at over $1 billion, with JioMusic’s valuation pegged at $670 million. Further, RIL will also invest $100 million, of which $20 million will be invested upfront to make the OTT platform the largest streaming service in the world.
RIL will also acquire a partial stake from the existing shareholders of Saavn for $104 million, while these shareholders retain their balance stake.
The three co-founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, will continue to lesd the the combined entity.
“The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network,” Akash Ambani, director, Reliance Jio, said.
“We are delighted to announce this partnership with Saavn, and believe that their highly experienced management team will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market,” he added.
The deal will combine the streaming media expertise of Saavn with the connectivity and digital ecosystem of Jio. With a massive addressable market opportunity of over 1 billion users in India and globally, the combined entity plans to invest aggressively to accelerate growth that would benefit all aspects of the ecosystem, including users, music labels, artistes and advertisers.
JioMusic has been India’s fastest growing music streaming app for over 60 consecutive weeks. JioMusic has sourced content from all the major Indian and international labels and now has over 16 million HD songs across 20 languages.
Saavn, on the other hand, is the only streaming service to make top grossing app charts in multiple markets including India, US, UK, Canada, the UAE and Singapore among others.
The combined platform will also build on Saavn’s award-winning original programming and artist originals (AO), which has re-defined the development, marketing and distribution of original audio content.
The transaction is subject to customary closing conditions.
Goldman Sachs acted as financial advisor, AZB & Partners and Covington & Burling LLP acted as legal advisors and Ernst & Young provided tax advisory and diligence services to RIL.
Saavn was advised by Gunderson Dettmer, Proskauer Rose and Shardul Amarchand Mangaldas & Partners as legal advisors, LionTree as exclusive financial advisor, PWC and KNAV & Co as accounting and tax advisors. Ernst & Young Merchant Banking Services Pvt. Ltd. provided independent valuation in respect of Indian regulatory filings while BDO India LLP acted as the independent valuation advisor for the transaction.