Strategic Merging: Reliance’s Viacom18 to Absorb Disney’s Star India in Share Swap Deal, Underlining Terms of Proposed Merger
Reliance Industries, India’s foremost conglomerate, and Walt Disney are reportedly in the final stages of crafting a non-binding term sheet for the merger of their Indian media operations, as per sources cited by the Economic Times on Tuesday. The current terms of the agreement, slated for a potential announcement in January, outline the integration of Disney’s Star India into a newly-formed unit of Reliance’s Viacom18 through a share swap deal.
In this proposed merger, it is anticipated that Mukesh Ambani-led Reliance will make a cash payment for a controlling 51 percent stake in the Viacom18 unit, with Disney retaining the remaining 49 percent, according to the Economic Times. The envisaged unit’s board is poised to maintain equal representation from both Reliance and Disney, ensuring a collaborative governance structure for the merged entity.
Disney and Reliance did not immediately respond to Reuters’ requests for comment.
Reliance, whose broadcast venture Viacom18 runs JioCinema, was reported by Bloomberg in October to be valuing Disney’s India assets, which comprises the Disney+ Hotstar streaming service and Star India, at between $7 billion (roughly Rs. 58,369 crore) and $8 billion (roughly Rs. 66,707 crore).
At the time, Disney valued the operations at $10 billion (roughly Rs. 83,384 crore).,Back in October, private equity firm Blackstone had held preliminary discussions with Walt Disney to acquire a stake in the Indian arm of the entertainment firm. Blackstone-backed US media firm Candle Media, founded by former Disney executives, had led conversations between the two parties.
It has meanwhile lost streaming rights for some key cricket tournaments to Indian billionaire Mukesh Ambani’s broadcasting unit – including the Indian Premier League and the national cricket team’s bilateral matches.