Disney boosts stake in India

Walt Disney Co. has reached a deal to more than double its stake in Indian TV and movie content maker UTV, the two firms said, underscoring the U.S. entertainment firm’s efforts to expand globally.

Disney will raise its holding in UTV Software Communications Ltd. to 32.1%, the same level as UTV’s founders, from 14.9%, by acquiring 9.35 million shares for 8.05 billion rupees ($203 million).

“This investment further underlines our commitment to international growth,” Disney International Chairman Andy Bird said in a teleconference from Mexico.

India has the world’s third-largest cable TV market, which is forecast to become Asia’s most lucrative pay TV market by 2015.

UTV produces television and movie content, makes gaming software and broadcasts television channels.

Disney and UTV founders have made a joint open offer to acquire a further 20% in UTV Software Communications at the same price as per Indian takeover rules. If the offer is successfully completed, Disney’s holding will rise to 51.6%.

However, Disney will not exercise voting rights on the shares acquired in the open offer for four years, capping its effective stake at 32.1%, UTV said.

It also said UTV founders had the right to buy any shares Disney would acquire as a result of the open offer in that time.

Disney also plans to invest 1.2 billion rupees for a 15% stake in UTV’s broadcasting unit, which has launched three channels and plans another this month.

In June, Disney tied up with India’s Yash Raj Films for a series of computer-animated movies targeting Indian audiences. The partnership’s first film, “Roadside Romeo,” is set for release this year.

Burbank-based Disney, which broadcasts Disney Channel and Toon Disney/Jetix in India, bought Hungama, a Hindi-language children’s channel, from UTV for $30.5 million in 2006.

Last month, NBC Universal Inc. entered a deal with Indian broadcaster New Delhi Television Ltd. to buy a 26% stake in the Indian firm’s overseas unit, which offers entertainment and lifestyle channels.