Reliance and Disney Ink Deal to Merge Media Businesses: Report
Under the terms of the agreement, the media division of Reliance and its affiliated companies are projected to possess a minimum of 61 percent ownership in the combined entity, while Disney will retain the remaining stake.
According to a report by Bloomberg, Reliance Industries Limited (RIL) and Walt Disney Co have entered into a binding agreement to merge their media operations in India, marking a significant development in the entertainment sector.
According to the terms of the agreement, the media division of Reliance and its associated entities are anticipated to possess a minimum of 61 percent ownership in the combined entity, while Disney will retain the remaining stake.
Reportedly, Disney has agreed to divest 61 percent of its India business to Viacom 18 for a valuation of $3.9 billion (Rs 33,000 crore).
Viacom18 is under the ownership of Mukesh Ambani, who serves as the Chairman of Reliance Industries Limited (RIL).
Earlier this month, there were reports indicating that Disney had reached an agreement to divest 60 percent of its Indian business to Viacom18. This anticipated deal is poised to have a notable impact on the Indian media and entertainment sector.
In the previous month, Sony of Japan terminated its merger proposal with Zee Entertainment due to disagreements regarding the leadership structure of the envisioned combined media entity.
Under scrutiny from activist shareholder Nelson Peltz for inadequate succession planning, Disney recently named two new directors – Morgan Stanley CEO James Gorman and former group chief executive at Sky Sir Jeremy Darroch – in late November. Additionally, in November, Walt Disney CEO Iger mentioned during an earnings call that the company was exploring possibilities but expressed a desire to remain in India, aiming to enhance its position and profitability.
Disney has made its third foray into India. Its initial entry in 1993 was via a partnership with KK Modi’s Group. Subsequently, it acquired a stake in Ronnie Screwvala’s UTV, although this venture did not unfold as expected.
Investor interest in Disney’s India operations began to wane in 2022 following the company’s loss of online streaming rights for the popular IPL tournament from 2023 to 2027, despite securing broadcast TV rights successfully.
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