In a significant move towards consolidating their positions in the Indian entertainment landscape, Reliance Industries Ltd and Walt Disney Co. have taken a substantial step forward in their mega-merger plans. The two corporate giants signed a non-binding agreement in London last week, marking progress toward what is anticipated to be the most significant entertainment and media merger in India. The finalization of this merger, expected to reshape the viewing and streaming experience in the country, is slated for February 2024.
The merger, poised to significantly benefit Mukesh Ambani’s Reliance, is on track for completion pending all commercial ratifications and regulatory approvals, with February as the target date. Despite efforts by Ambani’s company to expedite the process and wrap it up by January, sources suggest that the finalization is more likely to occur in February.
Months of negotiations preceded the signing of the non-binding agreement in London, where key representatives, including Kevin Mayer, a former Disney executive, and Manoj Modi, a close aide of Mukesh Ambani, were present.
As the Reliance-Disney Star merger progresses, the fate of the $10 billion merger between Zee Entertainment Enterprises and Sony Group Corp.’s local unit remains uncertain. Despite being announced two years ago, the deal is yet to be finalized, and ZEEL and Sony Group have requested an extension until January 2024 to conclude the deal.
The details of the Reliance-Disney Star deal include the creation of a step-down subsidiary by Reliance-owned Viacom18, which will absorb a significant portion of Star India’s stock, resulting in a 51-49 per cent share split between the two companies. Jio Cinema will also be part of the deal, with Reliance expected to hold a substantial stake in the merged entity. The transaction is projected to involve cash payment by RIL for controlling stock in the merged company. The merger is poised to bolster Disney’s OTT app Disney+ Hotstar, which is currently experiencing significant losses.
Regulatory scrutiny is expected in areas such as streaming businesses and advertising power during the cricket season, signaling potential changes in the viewing experience of the sport in India.
