Reliance and Disney to Merge TV Assets in India: ₹70,352 Cr Joint Venture

Reliance Industries Limited led by billionaire Mukesh Ambani and global media giant Walt Disney have announced the signing of definitive agreements to merge their media operations in India, creating a massive organization valued at ₹70,352 crore. As part of the agreement Viacom18's media operations will merge into Star India through a court approved process.

Reliance Industries announced that Nita M Ambani will chair the board of the merged entity, with former Disney executive Uday Shankar serving as vice chairman. Goldman Sachs advised Reliance and Viacom18 on financial and valuation matters while Raine Group and Citi Group served as financial advisers to Disney.

Key Highlights of Reliance-Disney India Merger

1. Shareholding Details

Reliance and its associates will have a 63.16% stake in the merged entity while Disney will own the remaining 36.84%. The joint venture is valued at ₹70,352 cr (USD 8.5 billion) post transaction. Reliance Industries will control the JV owning 16.34% while Viacom18 will hold 46.82% and Disney will have 36.84%. Disney plans to add more media assets to the joint venture pending approval from regulators and other parties. The entire deal including necessary approvals is expected to be finalized between the last quarter of 2024 and the first quarter of 2025.

2. Reliance's Investment in OTT Business

As part of the agreement Reliance has committed to investing ₹11,500 crore into the joint venture upon closing primarily aimed at fueling the growth of the OTT business. This strategic infusion will enable Reliance to strengthen its streaming platform Jio Cinema by leveraging Disney-Star India's expansive content library and sports broadcasting expertise.

3. Overview of JV Channels

Upon completion the merger will create India's largest media, entertainment and sports conglomerate boasting a portfolio of over 100 channels in multiple languages and two prominent OTT platforms. With a massive viewer base of 750 million nationwide the joint venture will offer an extensive array of entertainment content and sports livestreaming services including access to highly anticipated events through JioCinema and Hotstar.

4. Management Commentary

Mukesh D Ambani, Chairman & Managing Director of Reliance Industries praised the agreement as a milestone that marks the beginning of a new era in the Indian entertainment industry. Bob Iger, CEO of The Walt Disney Company expressed enthusiasm about the joint venture's potential to create long term value in the world's most populous market. Both leaders emphasized the combined entity's ability to deliver unparalleled content and digital services to Indian consumers.

5. Deal History

Disney acquired Hotstar and Star TV channels for $71 billion as part of their purchase of 21st Century Fox's global assets in 2019. They made cricket on Hotstar a paid service in 2020 after acquiring streaming rights for the Indian Premier League. They aimed to reach up to 100 million users within years but fell short of that goal. When Reliance acquired IPL rights in a $2.9 billion bid in 2022 and streamed the games for free Disney lost subscribers. By December 2022, 23 million Hotstar users had left reducing the total user base from 61.3 million in October.

Final Words

The strategic alliance between Reliance Industries and Walt Disney marks a milestone in the Indian entertainment landscape. Pending regulatory, shareholder and customary approvals the transaction is expected to be completed in the last quarter of 2024 or the first quarter of 2025 promising to reshape content consumption and viewer experience in India's dynamic media market.