News

Published: February 26, 2024
Updated: February 26, 2024

Reliance and Disney Forge Media Merger Pact

Overview of the Merger

Reliance Industries Limited (RIL) and Walt Disney Co have entered into a binding agreement to merge their media operations in India, signalling a significant development in the media and entertainment industry. According to Bloomberg reports citing insider sources, the merged entity is expected to be predominantly owned by Reliance and its affiliates, with RIL likely to hold a majority stake of at least 61 percent.

Stake Distribution Dynamics

While RIL is anticipated to retain a significant majority stake, the exact distribution of ownership between the two partners may evolve, contingent upon the inclusion of Disney's other local assets in the final deal. The finalized stake split is expected to be disclosed in the forthcoming announcement, scheduled for early this week.

Strategic Shifts in the Industry

This merger comes in the wake of strategic manoeuvres within the Indian media landscape, including Disney's recent agreement to sell 60 percent of its Indian business to Viacom18. The deal, valued at $3.9 billion, underscores the dynamic shifts occurring in the sector, particularly following the dissolution of the Zee-Sony merger last month.

Evaluation of Assets

Reliance's interest in Disney's India assets, which encompass the popular Disney+ Hotstar streaming service and Star India, dates back to October last year. Preliminary valuations ranged from $7 billion to $8 billion by Reliance, contrasting with Disney's valuation of $10 billion for these operations during the same period.

Competition and Market Dynamics

Notably, the media landscape is witnessing intensified competition, as evidenced by the impending battle for advertising rights in the Indian Premier League (IPL) 2024. Disney Star and Viacom18 are poised to vie for these lucrative rights, with negotiations already underway regarding sponsorship deals worth significant sums. The merger between Reliance and Disney marks a pivotal moment in the Indian media and entertainment industry, reshaping market dynamics and setting the stage for heightened competition and strategic realignments. As the deal progresses and stake ownership details unfold, industry observers will keenly monitor the implications for stakeholders and the broader media ecosystem.