FelixCatana
India’s largest publicly listed firm Reliance Industries and U.S. entertainment giant Walt Disney (NYSE:DIS) on Wednesday said they would merge their India television and digital streaming assets, forming an $8.5B media powerhouse on a post-money basis.
According to a joint statement by the companies, Reliance, its Viacom 18 unit and Disney will create a joint venture (JV) that will combine the businesses of Viacom 18 and Star India. Reliance will pour $1.4B into the JV at closing in order to boost its growth.
After the closing of the deal, Reliance – which is led by Asia’s richest man Mukesh Ambani – will own about 63% of the JV and Disney will own the rest ~37%.
The move by the two companies comes after lots of media speculation and reports on the merger. Disney (DIS) has struggled with its Indian operations over the years, with subscribers steadily falling at the Disney+ Hotstar streaming service and the company facing financial troubles over lucrative Indian cricket rights payments.
The deal reportedly values Disney’s (DIS) India operations at about $3.9B, significantly lower than its reported valuation of between $7B and $16B when Disney (DIS) acquired it via its $71.3B Fox media asset buyout in 2019.
Reliance and Disney’s (DIS) merged India television and streaming entity will be far larger than the other media companies in the Asian country, such as Zee Entertainment and Netflix (NFLX).
“This is a landmark agreement that heralds a new era in the Indian entertainment industry,” Reliance’s Ambani said.
The combined entity will have a content library of over hundred channels across entertainment and sports. According to the company, the JV will have over 750M viewers across India. Disney (DIS) will also grant exclusive content rights to the JV, with a license to more than 30K content assets.
“India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company,” Disney (DIS) top boss Bob Iger said.
India’s media and entertainment industry is expected to reach $100B by 2030, according to data from the government.
