India’s Reliance Industries and Walt Disney of the United States have revealed plans for the merger of their India TV and streaming media assets, paving the way for the creation of an $8.5 billion entertainment juggernaut that outpaces competitors in the world’s most populous nation.
Led by Asia’s wealthiest individual, Mukesh Ambani, Reliance will infuse $1.4 billion into the combined entity, securing a controlling interest of over 63 percent, while Disney will retain approximately 37 percent ownership, as per a joint statement released late on Wednesday.
For Disney, the merger marks an attempt to reverse the tide of user attrition in its struggling India streaming business and address financial pressures stemming from hefty payments for Indian cricket rights, illustrating the challenges foreign firms encounter in scaling up operations in India.
Sources familiar with the matter revealed that the merger values Disney’s India business at approximately one-fourth of its $15 billion valuation at the time of its acquisition in 2019 as part of the Fox deal.
Reliance Chairman Mukesh Ambani hailed the agreement as a landmark development that signals a new chapter in the Indian entertainment landscape, with his wife Nita Ambani set to assume the role of chairperson and former Disney executive Uday Shankar appointed as vice chair.
With a portfolio boasting 120 TV channels and two streaming platforms, the combined entity is poised to dominate India’s $28 billion media and entertainment sector, eclipsing rivals.
The partnership between Reliance and Disney not only fortifies their position against traditional competitors like India’s Zee Entertainment and Japan’s Sony but also bolsters their defense against streaming giants Amazon and Netflix.
The announcement comes on the heels of the collapse of a proposed $10 billion merger between Sony and Zee, underscoring the dynamic nature of the Indian media landscape. As Disney faces global pressures to streamline its operations, the deal with Reliance allows it to tap into the latter’s profound understanding of the Indian market, enabling the provision of an extensive range of digital services, entertainment, and sports content to consumers.