Disney, Reliance sign non-binding agreement for Indian media operations merger, says report

Reliance Disney Merger: Walt Disney and Reliance Industries have entered a non-binding agreement for their Indian media operations merger on December 25, 2023, according to a report by ET.

Under the merger agreement, Reliance Industries will hold 51 per cent of stakes via a combination of shares and cash, while Disney will be entitled to the remaining 49 per cent. The stakeholding pattern indicated Mukesh Ambani's Reliance Group will have more power, the report added.

Furthermore, the deal will be completed by February 2024, however, Reliance's aim is to complete the procedure by January, 2024.

Reuters reported two weeks ago that company executives were meeting in London to discuss the next stage of the media merger.

A merger would create one of India's biggest entertainment empires, competing with television interests such as Zee Entertainment and Sony , and streaming giants including Netflix and Amazon Prime, according to a Reuters report.

Reliance runs many TV channels and the JioCinema streaming app through its media and entertainment unit, Viacom18. Ambani has been locked in a fierce battle with Disney, offering free streaming of the Indian Premier League cricket tournament, whose digital rights were once with Disney in India.

This has sparked a user decline from Disney's streaming app Hotstar in the last few months. Since early this year, Disney has been navigating a sale or joint venture (JV) partnership for its India business, which includes many TV channels. The proposed deal would create a unit under Reliance's Viacom18 to take control of Star India through a stock swap, the Economic Times said. The parties are working on a plan to invest $1 billion to $1.5 billion in the business, it said, without specifying whether this was the total or the amount each would invest.

The board is expected to bring in an equal number of directors from Reliance and Disney, with at least two representatives each, as reported by ET. 

They are also in consideration of having at least two independent directors, but this might change in the coming weeks, the report further added..