Disney and Reliance Industries to Merge Media Operations in India, Creating $8.5 Billion Behemoth

What to know: Walt Disney Co. and Reliance Industries Ltd. have signed a binding pact to merge their media operations in India, creating a sector behemoth valued at $8.5 billion. The joint venture will see Disney controlling 36.84%, Reliance owning 16.34%, and Viacom18 Media Pvt. Ltd. controlling the remaining 46.82%. This move aims to capitalize on India's fast-growing entertainment market, providing exclusive rights to distribute Disney films and productions in the country.

Looking ahead: The deal is set to close in the last quarter of 2024 or the first quarter of 2025. By merging, the two companies are positioning themselves to become one of India's largest entertainment firms, better equipped to compete with global giants like Netflix Inc. and Amazon Prime Video. The merger will not only benefit Disney but also help Reliance strengthen its streaming platform, Jio Cinema, by gaining access to Disney-Star India's content library.

Deeper details: Nita Ambani will chair the joint venture, with Uday Shankar as the vice chairperson. Reliance's aggressive approach in the Indian media sector has positioned it as a key player, outbidding Disney in acquiring streaming rights for the Indian Premier League and securing broadcasting deals for popular HBO shows. The merger is expected to result in significant cost savings and enhance Disney's financial performance, according to analysts.

Stronger together: Goldman Sachs advised Reliance and Viacom18 on financial and valuation matters, while Raine Group and Citi Group served as financial advisers to Disney. The strategic partnership between Disney and Reliance signifies a shift in the Indian media landscape, with both companies leveraging their strengths to navigate the competitive market and cater to the diverse entertainment preferences of Indian consumers.