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Star buys majority in Asianet; forms JV with Rajeev Chandrasekhar
Star's acquisition of majority stake in Asianet shows the importance of growing South Indian media.
Asianet Communications Ltd (ACL), Malayalam's first entertainment television company, has finally landed in the hands of Rupert Murdoch's Star TV. Star will take a majority stake in a joint venture company with Asianet's current owner Rajeev Chandrasekhar's Jupiter Entertainment Ventures which will hold the TV company. The new JV will be called Star Jupiter Entertainment Television Ltd (Star Jupiter). The deal, however, does not include the news business. The financial terms of the deal are not available.
Chandrasekhar, the former telecom entrepreneur, bought ACL in late 2006 via his investment firm Jupiter Entertainment Ventures. It's not clear how much stake the original founders and promoters like Raji Menon will hold in the new joint venture. Menon holds about 26% stake.
ACL broadcasts channels in Malayalam (Asianet, Asianet Plus), Kannada (Suvarna), and Telugu (Sitara). The new JV, Star Jupiter, will also make additional investments for launching new channels in South India.Vijay, the Tamil language general entertainment channel currently operated and owned by Star, will come under Star Jupiter, according to a report in Indiantelevision.com.
"We will be holding at least 51 per cent and the deal is restricted to the TV entertainment business. The news business doesn't make sense for us as regulation allows only 26 per cent foreign direct investment," Star India CEO Uday Shankar has been quoted as saying by Indiantelevision..
Asianet Communications includes news channels (Asianet News in Malayalam, Suvarna News in Kannada), and entertainment businesses like (movies and television, FM radio, and digital media). They have plans to launch news channels in Tamil and Telugu in December this year.
News Corp. chairman Rupert Murdoch had said during his visit to India that the company would be investing $100 million for six regional channels.
Star's acquisition of Asianet Communications shows the importance of South Indian media growth story. According to Star CEO Paul Aiello, the deal is a game changing one for Star.
Peepul Capital has backed a regional media company based in Hyderabad called Associated Broadcasting Company Pvt Ltd.
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