Walt Disney Co. and billionaire Mukesh Ambani’s conglomerate have signed a binding pact to merge their media operations in India, creating a sector behemoth valued at $8.5 billion. Under the agreement, the US media company will control 36.84% of the joint venture, while Ambani-led Reliance Industries Ltd. will own 16.34%, and Viacom18 Media Pvt. Ltd. will control the remaining 46.82%. Reliance will also invest an additional 115 billion rupees ($1.4 billion) in the joint venture as growth capital, with Disney potentially contributing additional assets after regulatory approvals.
The joint venture will be granted exclusive rights to distribute Disney films and productions in India, with access to a license for over 30,000 Disney content assets. The deal is expected to close in the last quarter of 2024 or the first quarter of 2025. This strategic move reflects Disney’s efforts to adjust its strategy to appeal to viewers in India, a challenging market with intense competition from global giants like Netflix Inc. and Amazon Prime Video. The merger will create one of India’s largest entertainment firms, giving it more leverage to compete on a global scale.
The agreement will also benefit Reliance by strengthening its streaming platform, Jio Cinema, through access to Disney-Star India’s content library and leveraging its sports broadcasting experience. Nita Ambani will serve as the chairperson of the joint venture, with Uday Shankar slated to be the vice chairperson. Goldman Sachs acted as the financial and valuation adviser for Reliance and Viacom18, while Raine Group and Citi Group served as financial advisers to Disney.
Disney’s decision to merge its media operations with Reliance in India comes as the company grapples with changing consumer preferences and increasing competition in the entertainment industry. By joining forces, the two companies aim to create a powerhouse in the Indian entertainment market, with the potential to challenge global competitors and strengthen their position in the rapidly growing sector. The partnership will allow them to leverage their respective strengths and resources to drive growth and innovation in the region.
The merger is expected to have significant implications for the Indian media landscape, paving the way for a new era of collaboration and competition in the industry. With exclusive rights to distribute Disney content and access to a vast library of entertainment assets, the joint venture is poised to reshape the entertainment landscape in India and beyond. As the deal moves forward, both companies are poised to capitalize on the opportunities presented by the fast-growing Indian market and position themselves for long-term success in the evolving media landscape.
