Reliance and Disney (DIS) forge $8.5 billion Indian media titan via merger deal

February 28, 2024 8:57 AM EST

India’s conglomerate Reliance Industries (OTC: RLNIY) and Walt Disney (NYSE: DIS) announced on Wednesday the merger of their Indian television and streaming operations on Wednesday.

Reliance shares fell nearly 2% in Mumbai, while DIS slipped 0.3% in premarket trading in the US.

The deal combines the two companies’ assets into an entertainment powerhouse valued at $8.5 billion, setting a new benchmark in India's media landscape.

Under the terms of the agreement, Reliance, led by billionaire Mukesh Ambani, Asia's wealthiest individual, will contribute $1.4 billion to the new venture. Reliance and its affiliates are set to own a controlling interest of over 63%, while Disney will retain approximately 37% ownership.

This strategic merger comes as Disney seeks to revitalize its streaming service in India, which has suffered from declining subscriber numbers and financial challenges, including the hefty costs associated with securing Indian cricket broadcasting rights.

The valuation of Disney's Indian operations through this merger represents a significant dip from the $15 billion valuation at the time of its acquisition through the Fox deal in 2019.

Nita Ambani, Mukesh Ambani's wife, is slated to chair the board of the merged entity, with Uday Shankar, a former Disney executive, assuming the role of vice-chair.

The collaboration will create a media behemoth with 120 television channels and two streaming platforms, enhancing Ambani's competitive stance against global and local contenders such as Sony, Zee Entertainment, and Netflix in the lucrative $28 billion media and entertainment sector.

"The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment," the companies said in a joint statement.

By Vahid Karaahmetovic

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