Reliance Industries, India’s foremost company, and Walt Disney have reportedly entered a non-binding term agreement to consolidate their Indian media operations. Sources, unnamed in the report, revealed that in this proposed merger,
Reliance is anticipated to hold a majority stake of 51%, utilizing a blend of shares and cash, while Disney would retain the remaining 49%. This arrangement would grant greater control to Mukesh Ambani’s Reliance group within the merged entity, as detailed by the newspaper.
The report further suggests that the completion of this deal is projected to occur by February, with Reliance striving to conclude the process by the conclusion of January, contingent upon securing regulatory approvals.
Reliance and Disney did not immediately respond to Reuters requests for comment.
Reuters reported two weeks ago that company executives were meeting in London to discuss the next stage of the media merger.
A merger would create one of India’s biggest entertainment empires, competing with television interests such as Zee Entertainment and Sony and streaming giants including Netflix and Amazon Prime.
Within its media and entertainment arm, Viacom18, Reliance oversees numerous TV channels and operates the JioCinema streaming app. Mukesh Ambani’s conglomerate has engaged in a competitive rivalry with Disney, notably by offering complimentary streaming access to the Indian Premier League cricket tournament, previously under Disney’s digital rights purview in India. Consequently, this strategy has led to a notable exodus of users from Disney’s streaming platform, Hotstar, over recent quarters.
Since the beginning of the year, Disney has been exploring avenues for a potential sale or forming a joint venture partnership for its India business, encompassing several TV channels. As per the Economic Times, the proposed merger seeks to consolidate these assets under a unit within Reliance’s Viacom18, consequently gaining control of Star India through a stock exchange mechanism.
Reportedly, discussions are underway regarding a substantial investment ranging between $1 billion to $1.5 billion in this collaborative venture, although the report did not specify whether this sum represented the total investment or the individual contribution from each party.
The governance structure for the envisioned unit is anticipated to feature an equitable board representation from both Reliance and Disney, with a minimum of two representatives from each company, according to the newspaper. Moreover, there are considerations for including at least two independent directors; however, these particulars remain subject to potential modifications in the forthcoming weeks.