The Walt Disney Company has entered into an agreement to acquire Hungama TV and purchase an equity stake of 14.9 per cent of expanded capital in UTV Software Communications
Walt Disney, which has two kids’ channels in India – Toon Disney and the Disney Channel – is all set to acquire UTV’s sole television channel, Hungama TV. Disney will shell out US$ 30.5 million (approximately Rs 137.25 crore) for Hungama.
In addition, Disney has bought a 14.9 per cent stake in the parent company, UTV Software, which is worth US$ 14 million (approximately Rs 63 crore). In total, Disney has invested around Rs 200 crore in the Indian television software company.
According to Rajat Jain, managing director, Walt Disney, India, this deal is part of the company’s long-term expansion plans in India.
A few months ago when agencyfaqs! had asked Ronnie Screwvala, CEO of UTV, if he would be ready to sell off Hungama TV if he was offered a hefty price, he had replied that they were trying to build an overall integrated business model. So, building a brand for two years and then selling it off didn’t make sense.
However, in the last two years, Hungama TV has evolved as a strong brand and Jain of Disney is looking forward to strengthen Disney’s network in India with its acquisition.
When quizzed about what would be the new colours for Hungama TV under the new banner, Jain said that it would be premature to comment on this. “The channel has successfully created a distinct identity for itself in the kids’ genre and it will take at least four-five months before we decide how to rejuvenate it while maintaining its core strengths.”
While Disney and Toon Disney are believed to be more international in their programming, Hungama has always had an Indian flavour to it. After all, it was the only local kids’ entertainment channel. Walt Disney plans to continue with the distinct identity that Hungama has carved for itself. “Disney has a lot of expectations from this acquisition. Hungama TV will strengthen the current bouquet of channels under Walt Disney,” said Jain.
The stake in UTV is also significant for Disney’s plans in India and, as Jain pointed out, this strategic partnership between the two groups will see lots of opportunities for synergy between the two brands.
When asked if UTV’s animation division will provide content for Disney both in India as well as internationally, Jain did not rule out the possibility, but said that they would consider it now that they are formally associated with UTV.
© 2006 agencyfaqs!