Reliance Industries, the Indian conglomerate in oil-to-telecom sector bought a stake in Indian music streaming service called Saavn and decided to merge the company with its JioMusic app and thus create a new unit that is reported said to be valued at $1 billion. Reliance will also have to buy a stake from Saavn’s current shareholders for $104 million.
Reliance’s plan is to invest over $100 million, $20 million of it upfront for the expansion of JioMusic-Saavn merge, according to a joint statement issued by both companies.
Saavn’s current investors include Tiger Global Management, Liberty Media and Bertelsmann and all of them will keep a holding in the new music services.
Reliance, owned by India’s wealthiest person Mukesh Ambani did not reveal the amount of stakes it holds in the JioMusic-Saavn merge but did disclose the $1 billion valuation for the acquired firm includes a $670 million valuation for JioMusic.
Reliance’s Jio telecoms business recorded India’s fastest-growing phone carrier since its inception in September 2016. It messed up the entire telecom market by offering discounts and free call options, while growing its library of Indian films, music and TV shows.
Several analysts suggest that Jio is trying to encourage the view of entertainment and sports content among user to increase the amount of data users consume. For instance, it has reached agreements with several partners by buying up stakes in Indian film studio Eros International and Bollywood production house Balaji Telefilms.