India’s Reliance Industries and Walt Disney of the United States have announced the merger of their India TV and streaming media assets, creating an $8.5bn entertainment powerhouse far ahead of rivals in the world’s most populous nation.
Reliance, led by Asia’s richest man Mukesh Ambani, will inject $1.4bn in the merged entity, with the company and its affiliates holding a more than 63 percent stake. Disney will hold about 37 percent, the companies said in a joint statement late on Wednesday.
For Disney, the merger follows a long struggle to arrest a user exodus from its bleeding India streaming business and the financial strain caused by billions of dollars in Indian cricket rights payments, in another example of how foreign businesses can struggle to grow in India.
The merger values the India business of the US entertainment giant at just about a quarter of the $15bn valuation when Disney acquired it as part of its Fox deal in 2019, sources have told the Reuters news agency.
The companies said the transaction values the merged venture at about $8.5bn on a post-money basis. They did not explain how they arrived at such a valuation.
“This is a landmark agreement that heralds a new era in the Indian entertainment industry,” said Ambani, whose wife Nita Ambani will serve as the chairperson and former top Disney executive Uday Shankar will be the vice chair.
Together, the Reliance-Disney merged entity will have 120 TV channels and two streaming platforms, helping Ambani eclipse rivals in the country’s $28bn media and entertainment sector.
“The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment,” the companies said in a joint statement.
