Disney and Mukesh Ambani’s Reliance Forge $8.5 Billion Media Merger in India’s Entertainment Market Power Play

Featured & Cover Disney and Mukesh Ambani's Reliance Forge $8 5 Billion Media Merger in India's Entertainment Market Power Play

Walt Disney Co. and the conglomerate led by billionaire Mukesh Ambani have entered a binding agreement to combine their media operations in India, forming a dominant entity worth $8.5 billion in one of the world’s most rapidly expanding entertainment markets.

According to a statement by Reliance Industries Ltd. on Wednesday, the US media giant will hold a 36.84% stake, while Ambani’s Reliance Industries Ltd. will possess 16.34% in the joint venture. Viacom18 Media Pvt. Ltd. will retain the remaining 46.82%.

Reliance plans to inject an additional 115 billion rupees ($1.4 billion) into the joint venture for expansion purposes, with Disney potentially contributing additional assets pending regulatory approvals. The joint venture will gain exclusive rights to distribute Disney content in India, encompassing a vast catalog of over 30,000 assets.

The deal is slated to conclude either in the final quarter of 2024 or the initial quarter of 2025.

The agreement, previously reported by Bloomberg on January 25, reflects Disney’s strategic shift to engage the burgeoning audience in India, a nation boasting over 1.4 billion inhabitants. Intense market competition has posed challenges for global players seeking to establish a foothold. The merger, upon finalization, will forge one of India’s largest entertainment conglomerates, empowering it to compete more vigorously against international rivals like Netflix Inc. and Amazon Prime Video.

Additionally, the partnership will aid Reliance, a relative newcomer in India’s media landscape, in fortifying its streaming service, Jio Cinema, by leveraging Disney-Star India’s content reservoir and tapping into its expertise in sports broadcasting.

Nita Ambani is set to chair the joint venture, with Uday Shankar designated as vice chairperson, as outlined in the Reliance statement.

Goldman Sachs provided financial and valuation advisory services for Reliance and Viacom18, while Raine Group and Citi Group served as financial advisors to Disney.

Disney has grappled with various challenges in India, including subscriber retention and securing sought-after media assets. Conversely, Reliance has adopted a more aggressive stance in recent years, seizing a larger share of the local media and entertainment sectors.

Ambani’s conglomerate has emerged as a formidable rival to Disney in the Indian market. In 2022, Reliance outbid Disney for the streaming rights to the Indian Premier League, a hugely popular cricket tournament valued at $6.2 billion. Furthermore, it clinched a multi-year agreement in April to broadcast HBO shows from Warner Bros Discovery Inc., including acclaimed series such as Succession, House of the Dragon, and The Last of Us, which were previously under Disney’s purview.

Geetha Ranganathan, an analyst at Bloomberg Intelligence, noted in a December 12 report that the merger “can result in meaningful cost savings and improve Disney’s bottom line.”

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