Reliance and Disney Ink Binding Agreement to Combine Media Business in India
Walt Disney and Reliance Industries have inked a legally binding agreement to combine their media businesses in India. At least 61% of the combined company is anticipated to be owned by Reliance and its affiliates, with Disney holding the remaining shares. It is expected that the deal will be revealed early this week. There were rumors earlier this month that Disney had agreed to sell Viacom18 60% of its Indian operations. Reliance Industries Limited is the owner of Viacom18. (RIL) for a price of $3.9 billion (INR 33,000 crores).
Reliance and Disney ink agreement for combined media operations in India
By this week, the agreement’s signing and other specifics should be made public. Depending on how Disney’s other local assets are considered by the time the deal is closed, the partners’ respective stake shares could change. The agreement is anticipated to be a big step for the Indian media and entertainment sector. Reliance may think about acquiring Tata Play Ltd., a broadcast service provider, in which Disney owns a minority stake. Once the agreement is finalized, a powerful media organization will be established in the nation.
Reliance valued Disney’s India holdings in October of last year, which included Star India and the Disney+ Hotstar streaming service, at a price between $7 billion and $8 billion. Disney valued these businesses at $10 billion at the same time. Last month, it was revealed that Disney Star and Viacom18 were preparing to battle it out for the rights to advertise in the Indian Premier League (IPL) in 2024.
Read More: Walt Disney and Reliance Industries Sign a Non-Binding Agreement
Implications of the agreement
Disney expects it to be a game changer, considering the difficulties it has encountered in India in recent years. Following a decline in revenue and subscribers, the company had been considering options for its Indian business. It includes establishing a joint venture or selling a whole stake. However, the agreement will allow Reliance to compete with the likes of Netflix and other streaming behemoths and grow even further in the media and entertainment sector, which is currently experiencing the fastest growth in the world.
Disney’s attempts to enter the Indian market
Reliance has recently taken a bigger share of the Indian media and entertainment industry. On the other hand, Disney has been struggling to hold onto subscribers and acquire desired media assets. In one of the entertainment markets with the fastest rate of growth in the world, they would combine to form a powerful media giant. Disney has now made three trips to India. The first was achieved in 1993 through a partnership with the KK Modi Group. Next, it was introduced to Ronnie Screwvala’s UTV, but that also did not proceed according to plan. The media merger between Zee Entertainment Enterprises and Sony’s India division fell through due to disagreements. So it is anticipated that the merger will also cause significant disruption in the industry.
Read More: Disney Agrees to Sell 60% of India Business to Reliance-backed Viacom18
