Reliance Industries and Walt Disney have reportedly signed a non-binding term sheet to combine their Indian media operations, according to The Economic Times.
As detailed in The Economic Times report, Viacom18, owned by Reliance, will create a subsidiary that absorbs a significant portion of Star India’s stock, resulting in a shareholding pattern of 51% for Reliance and 49% for Disney in the merged Indian media company.
The merger will also include Jio Cinema, with Reliance expected to maintain a substantial stake and pay cash for controlling stock in the amalgamated entity. Having sealed the term sheet in the UK last week, Reliance and Disney are on track to finalise this significant entertainment and media merger in India by February 2024, reshaping the country’s viewing and streaming landscape.
Despite Reliance’s initial aim to wrap up the deal by January, the mega-merger is slated to undergo all necessary commercial and regulatory approvals by February, according to The Economic Times report. Sources cited by the publication reveal that after months of negotiations the non-binding agreement was signed in London, where Kevin Mayer, a former Disney executive, and Manoj Modi, a trusted aide to Mukesh Ambani, were both present as well.
The merger, if completed, would give rise to one of India’s most substantial entertainment empires, positioning it in competition with TV players like Zee Entertainment and Sony, as well as streaming giants such as Netflix and Amazon Prime. An official announcement of the merger could be made as early as next month. The proposal suggests that even after the completion of any cash and stock swap transaction, Disney is likely to retain a minority stake in the Indian company.
