Disney
has entered into an agreement to acquire 100 per cent
of United Home Entertainment LTD (Hungama TV) at an
enterprise valuation of $30.5 million and purchase
equity stake of 14.9 per cent of expanded capital
in UTV Software Communications LTD, at a consideration
of $ 14 million. So, the total combined investment
is $ 44.5 million.
The
announcement confirms the news first put out by Indiantelevision.com
that Disney would be buying
into Hungama TV and picking up a small stake in
UTV.
Hungama
TV COO Zarina Mehta will be working closely with the
Disney team for the next three months to ensure a
smooth organisational and operational integration
of Hungama TV into Disney's portfolio of kids channels.
Post that Mehta will be working with Disney as a consultant
for a period of six months to a year.
Once
final, the acquisition will firmly establish Disney's
ties in a rapidly growing media market where local
content product is key. The combination of the three
kids' channels -- Disney Channel, Toon Disney and
Hungama TV -- will establish Disney as a strong contender
against the market leader Turner India (Cartoon Network
and Pogo).
"India
is a long term strategic priority for the Walt Disney
company. The acquisition of Hungama TV and the investments
in UTV will significantly advance our presence in
India and allow us to develop a strategic relationship
with one of the countries leading integrated media
companies," said Walt Disney International president
Andy Bird.
"Not
only will we be acquiring a great channel asset, we
will also be able to participate in UTV's diversified
businesses and bring to UTV our global media and synergy
expertise, including developing and distributing high
quality family friendly content in nearly 200 countries
worldwide and expanding related franchises across
film, TV, music, merchandise, new media and live entertainment,"
said Bird.
When
queried on Disney's plans to launch a theme park in
India, Bird answered in the negative. "We are
not looking at a theme park in India," he said.
"TV
is and will continue to be the major growth engine
in building franchise affinity in India. Integrating
Hungama TV in the Walt Disney Company's existing India
channel portfolio of Disney Channel and Toon Disney
will allow Disney to fortify its already strong presence
in India's kids TV market," said Disney Channel
Worldwide president Rich Ross.
When
queried about the integration process of Hungama TV
into Disney, Walt Disney Television International
(Asia Pacific) senior vice president and managing
director Nicky Parkinson said, "At present we
are not sure how the integration will take place.
We are in the process of finding out a way to best
talk to kids. We are not here to cannabalise the market
place. India is a relatively nascent market but one
which has phenomenal potential."
"Hungama
TV has proven its appeal to Indian children and families
with compelling entertainment choices and has in a
brief period built a strong management team and sucked
out a leadership position in the competitive children's
TV environment. We are also delighted that Disney
has chosen to make a strategic investment in UTV,
which will augment our business in India and around
the world," said UTV group CEO Ronnie Screwvala.
Launched
in September 2004, Hungama is a 24-hour Hindi-language
entertainment cable channel for children and is currently
in a close fight with Turner's Pogo channel for the
the number two position in the Indian kids space behind
leader Cartoon Network. Hungama TV has a staff strength
of 71.
Disney
currently reaches over 107 million television homes
in India through a programme block on Doordarshan
and Disney Channel and Toon Disney/Jetix reached approximately
30 million homes on cable and satellite in India.
UTV
has a diversified set of businesses, which includes
television and film production and distribution, animation
production, and other services.
Also
Read:
UTV
scrip up on Disney deal buzz
