Reliance and Disney merge India

$8.5 billion joint venture launched as Reliance and Disney merge India media businesses

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By Vivek Kumar

Reliance and Disney merge India media businesses to launch $8.5B joint venture. Reliance’s portfolio of Viacom18, Disney, and its media business in India will merge, creating India’s largest media company. Reliance will be the controlling joint venture and directly own 16.34% of this merged entity. It has been valued at $8.5 billion. Disney will hold 36.84% of the combined entity and Viacom18, backed by Reliance, will have 46.82%.

Reliance and Disney merge India

Reliance, the most valuable company in India, believes that merging media assets with Disney India will allow it to serve its customers better and expand its market share in India’s fast-growing market. Reliance owns 75% of Viacom18 and plans to invest $1.4 Billion in the joint venture as part of its growth strategy.

The deal is bittersweet for Disney. Disney once valued their India business at around $16 billion. The streaming service Hotstar became part of Disney India following the mega Fox acquisition. This allowed the U.S. company to expand in several Southeast Asian streaming markets aggressively.

Disney also disclosed that in a SEC filing on Wednesday, the joint venture would incur an impairment non-cash before tax of between $1.8 and $2.4 billion. “Approximately half of this reflects a written-down of Star India’s net assets” in the current quarter.

Reliance India and Disney India have merged in a “strategic merger” that brings together two of the most popular Indian streaming services, JioCinema & Disney+Hotstar. This joint venture includes exclusive rights in India to Disney movies, TV channels, and other productions. It also includes 30,000 assets. The merged entity, which includes JioCinema, Hotstar, HBO, Showtime, and NBCUniversal, will be the digital home for content from HBO Showtime, and NBCUniversal.

According to the companies, this combined unit will reach more than 750 million viewers in India. This new venture is taking place at a time of great difficulty for large media companies in India. Last month, Sony canceled the merger of its India unit with Zee Entertainment. The conclusion of a two-year acquisition process marked the formation of a $10 billion giant targeting the South Asian market.

Mukesh Ambani of Reliance, Asia’s richest man, called the Disney deal “a landmark agreement” that would herald a new age in the Indian entertainment sector.

He said: “We’ve always respected Disney as being the best media company in the world and we are excited to form this strategic joint venture. It will allow us to pool our resources, creativity, and market insight to provide unparalleled content to audiences throughout the country at affordable prices. We are delighted to welcome Disney as an important partner of Reliance Group.”

The merger comes after a fierce rivalry between Hotstar, JioCinema, and other platforms that competed to attract top Disney talent. Viacom18 outbid Disney by $3 billion to secure streaming rights for India’s most popular cricket tournament, Indian Premier League. This allowed Viacom18 to break many Hotstar viewing records within a year. Disney paid the same amount for TV rights. Both companies have made a lot of their catalogs available for free in India to attract users.

The new entity will have both TV and digital rights for key cricket sporting events like the IPL and ICC in India. Viacom18 holds digital streaming rights, while Star has TV broadcasting. The JV will broadcast the 2023-27 IPL.

Disney CEO Bob Iger stated that the joint venture would “create long-term values for the company”. He also added: “Reliance understands the Indian market and consumers, and together, we will create one the country’s leading media companies. This will allow us to better service our customers with a wide portfolio of digital and entertainment content.

The merger reunites former Star India CEO Uday Shankar with James Murdoch and the enterprise they constructed together over a decade. Shankar left Star India in 2020 after disputes with Disney. He and Murdoch then launched Bodhi Tree – an India media investment vehicle, backed by $1.7billion from Qatar Investment Authority – which had invested more than $500m in Viacom18. Shankar returns to the board of the merged company as vice-chair.

The merger will be completed by March 2025, pending regulatory approval and shareholder approval.

Updated throughout the story with new details