Mukesh Ambani's Reliance, Disney working to finalize India media operations merger: Report

Billionaire Mukesh Ambani's Reliance Industries (RIL) and WaltDisney Co are reportedly on the verge of merging their Indian media operations.

According to a Reuters report, A new unit of Reliance's Viacom18 is set to absorb Disney's Star India in a share swap deal, a move which could reshape the media landscape in India, combining the strengths of two major players in the industry.

Financial details of the deal

The report added that Reliance is expected to pay cash for a 51% stake in the proposed Viacom18 unit, while Disney will own the remaining 49%.

The valuation of Disney's India assets, including the Disney+ Hotstar streaming service and Star India, is estimated to be between $7 billion and $8 billion. However, Disney had previously valued these operations at $10 billion.

Who will represent the board? 

The board of the new unit is anticipated to have equal representation from both Reliance and Disney. The merger comes at a time when Reliance's JioCinema has been intensifying competition in the streaming market, notably by offering free access to the Indian Premier League (IPL) cricket tournament, a move that strategically undercut Disney's previous digital rights ownership.

What will be the impact of of merger?

The merger, if finalized, will see Reliance injecting funds to secure a controlling stake in the merged entity. Both companies are also expected to contribute cash as capital investment, potentially in the range of $1-1.5 billion, the report added.

It's worth mentioning that the merged entity is likely to benefit from Disney India's library content and a five-year license for exclusive subscription video-on-demand (SVOD) content for Disney+ originals.

The merger is expected to be officially announced as early as January, following the completion of due diligence and valuation exercises by independent firms, it added.

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