Reliance, Disney India merge streaming, TV assets to create ₹70,352 crore media powerhouse; 5 key highlights

Reliance Industries said Nita M Ambani would chair the board of the combined entity, and former top Disney executive Uday Shankar would serve as vice chairman. Goldman Sachs was the financial and valuation adviser for Reliance and Viacom18. Raine Group and Citi Group acted as financial advisers to Disney, said the oil-to-retail conglomerate in its exchange filing.

Reliance-Disney India merger: Here are 5 key highlights

1.RIL-Disney shareholding details

Reliance and its affiliates will hold a 63.16 per cent stake in the combined entity while Disney will have the remaining 36.84 per cent shareholding. The transaction valued the JV at ₹70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies. “The JV will be controlled by RIL and owned 16.34 per cent by RIL, 46.82 per cent by Viacom18 and 36.84 per cent by Disney,” said Reliance Industries in its statement. 

Disney may also contribute certain additional media assets to the joint venture, subject to regulatory and third-party approvals. The entire transaction is subject to regulatory, shareholder and other customary approvals. It is expected to be completed in the last quarter of calendar year 2024 or the first quarter of 2025.

2.Reliance to invest ₹11,500 crore for OTT biz

Reliance has also agreed to invest at closing ₹11,500 crore into the joint venture to grow the over-the-top (OTT) business. The deal will also help Reliance — a relative newcomer to the Indian media sector — bolster its streaming platform, Jio Cinema, by accessing Disney-Star India’s content library as well as draw on its sport broadcasting experience.

The combination of the media expertise and diverse content libraries of Viacom18 and Star India will allow the JV to offer more appealing domestic and global entertainment content and sports livestreaming services, while delivering an innovative and convenient digital entertainment experience at affordable prices.

3. JV channel details

The successful completion of the deal would create the biggest firm in Indian media, entertainment  and sports sector, with over 100 channels in several languages, two leading OTT platforms and a viewer base of 750 million across the country.

The JV will bring together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.

The merged entity will also be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.

Also Read: Reliance, Disney India join forces to create an entertainment juggernaut

4.Management Commentary

Mukesh D Ambani, Chairman & Managing Director of Reliance Industries called the deal a ‘landmark agreement that heralds a new era in Indian entertainment industry.’

‘’We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group,” said Ambani.

Bob Iger, CEO of The Walt Disney Company, said, “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. 

‘’Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content,” added Iger.

5.Deal history

Disney acquired streaming service Hotstar and Star TV channels – which has been a household name in India, when it paid $71 billion for 21st Century Fox global assets in 2019. With the streaming rights of the Indian Premier League (IPL), the world’s richest cricket league, in the bag, Disney made cricket on Hotstar a paid service in 2020 and was confident about reaching up to 100 million users within years, according to news agency Reuters.

However, that did not happen. After Reliance took IPL rights away in a $2.9 billion bid in 2022 and streamed the games for free, Disney subscribers fled – out of 61.3 million Hotstar users in October 2022, 23 million had left by December, said Reuters.

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Published: 28 Feb 2024, 07:59 PM IST