MUMBAI, March 23 (Reuters) - Oil-to-telecoms conglomerate Reliance Industries is buying a stake in Indian music streaming service Saavn and will merge it with its JioMusic app to create a new entity it said would be valued at $1 billion.
As part of the deal, Reliance will buy a stake in Saavn from its shareholders for $104 million. It also plans to invest up to $100 million, $20 million of it upfront, to expand the JioMusic-Saavn combine, both sides said in a joint statement on Friday.
Saavn's existing investors - including Tiger Global Management, Liberty Media and Bertelsmann - will retain a holding in the new music services, according to the statement.
Reliance, controlled by India's richest man Mukesh Ambani, did not disclose the size of its stake in the JioMusic-Saavn combine, but it said the $1 billion valuation for the merged entity included a $670 million valuation for JioMusic.
Reliance's Jio telecoms business has been India's fastest-growing phone carrier since its launch in September 2016. It disrupted the market with discounts and free voice offerings, while expanding its library of Indian films, music and TV shows.
Analysts say Jio is betting on entertainment and sports content to boost users' spend on data. It has agreed several partnerships by buying stakes in Indian film studio group Eros International and Bollywood production house Balaji Telefilms. (Reporting by Sankalp Phartiyal; Editing by Devidutta Tripathy and Jane Merriman)