Reliance Industries Set to Acquire Majority Stake in Disney India Amidst Talks of Mega Merger

Reports indicate that Reliance Industries, headed by Mukesh Ambani, is in advanced discussions with Disney to combine their media operations in India. Reliance is reportedly eyeing a controlling stake of 51%-54%, valuing Disney’s domestic business at an estimated $3.5 billion. A potential collaborator in this venture is Bodhi Tree, a joint venture involving James Murdoch and Uday Shankar, which might secure around 9% stake in the merged entity.

Although the reported deal is expected to be finalized in February, it is essential to note that Mint has not independently verified this information.

The strategic alliance between Reliance and Disney aims to create an entertainment powerhouse in India, given their significant presence in the streaming service domain and a combined total of 120 television channels.

As part of the agreement, Viacom 18, the broadcast division of Reliance Industries, is anticipated to merge with Disney India businesses. However, it’s worth noting that Disney’s India assets have experienced a notable decrease to $4.5 billion, half of the previously targeted $10 billion, partly due to Zee Entertainment withdrawing from a $1.4 billion deal.

In response to Zee Entertainment’s exit, Disney Star is reportedly contemplating legal actions. If the terminated agreement involves an arbitration clause, the dispute resolution would likely proceed through arbitration proceedings. Alternatively, if the agreement lacks an arbitration clause, Disney might pursue legal action against Zee for damages.

Amidst Zee Entertainment’s separation from Sony, the financial strain is evident as they have communicated their intention to Disney Star about not proceeding with the initial payment of approximately $200 million.

Moreover, the fallout between Zee Entertainment and Disney Star affects the strategic licensing agreement signed on August 30, 2022. The deal granted Zee exclusive television rights for various ICC men’s events and key ICC U-19 events, with Disney Star retaining exclusive streaming rights through Disney Hotstar for all ICC tournaments.

As discussions progress, the potential merger between Reliance and Disney signifies a significant development in the Indian media and entertainment landscape, with implications for both companies and the industry as a whole.