Reliance and Disney ink deal to consolidate media businesses through a merger
In a landmark development within the entertainment industry, Reliance Industries Limited (RIL) and Walt Disney Co have officially entered a binding agreement to merge their media operations in India. According to reports from Bloomberg, the agreement outlines that the media unit of Reliance and its affiliates are set to possess a minimum of 61% stake in the consolidated entity, with Disney retaining the remaining share.
Sources indicate that Disney has concurred to divest 61% of its India business to Viacom 18 at a valuation of $3.9 billion (approximately Rs 33,000 crore). Notably, Viacom18 is under the ownership of Mukesh Ambani, Chairman of Reliance Industries Limited (RIL). This strategic move has the potential to bring significant transformation to the Indian media and entertainment landscape.
Earlier reports in the month had suggested that Disney had agreed to part with 60% of its Indian business in favor of Viacom18. The deal, now finalized, assumes prominence in light of its potential impact on the media and entertainment sector in India.
The preceding month witnessed the termination of the merger plan between Sony of Japan and Zee Entertainment due to disagreements concerning the leadership structure of the proposed unified media entity. Disney, facing criticism from activist shareholder Nelson Peltz for insufficient succession planning, appointed two new directors, namely Morgan Stanley CEO James Gorman and former group chief executive at Sky Sir Jeremy Darroch, in late November. During an earnings call the same month, Walt Disney CEO Iger revealed the company's consideration of options in India, expressing the intent to enhance its position and financial performance in the market.
This marks Disney's third venture into the Indian market, with its initial entry in 1993 through an alliance with KK Modi's Group, followed by an investment in Ronnie Screwvala's UTV. The current merger signifies a pivotal moment in the evolving landscape of the Indian media and entertainment industry.
