Disney-Reliance merger to be finalized by February
What's the story
Reliance Industries, India's top-valued company, is joining forces with Walt Disney to merge their Indian media operations.
As reported by The Economic Times, the companies signed a non-binding term sheet in a meeting in London last week.
This merger would establish one of India's biggest entertainment powerhouses, rivaling TV giants like Zee Entertainment and Sony, as well as streaming behemoths Netflix and Amazon Prime.
The deal is anticipated to be finalized by February, completing all commercial ratifications and regulatory approvals.
Details
Ownership structure and investment measures
In the proposed merger, Reliance would hold a 51% stake through a mix of shares and cash, while Disney would own the remaining 49%.
Both parties are said to be developing a plan to invest between $1 billion and $1.5 billion in the venture, though it remains unclear if this is the total sum or each party's contribution.
The board is expected to have an equal number of directors from both Reliance and Disney, with at least two representatives each.
Scenario
Impact on streaming services and future plans
This merger follows a decline in users for Disney's streaming app Hotstar in recent months, triggered by Reliance providing free streaming of the IPL, which previously had its digital rights with Disney.
Since early this year, Disney has been considering a sale or joint venture partnership for its India business, which encompasses numerous TV channels.
As per ET, the proposed deal would create a unit under Reliance's Viacom18 to assume control of Star India through a stock swap.