Reliance Industries and the Walt Disney Company have finalized a merger deal, combining Viacom18 and Star India to create India's largest media empire, encompassing TV broadcasting, streaming, movies, and sports.
Merger Details
Reliance is expected to hold a 61% stake in the merged entity, with Disney owning 33%, and Bodhi Tree Systems retaining 6%. The deal, in progress for over four months, is set to be announced early this week, reshaping India's media landscape significantly.
Financial Investments
Reliance is likely to invest $1-$2 billion, primarily to infuse funds into the merged entity and partially for the buyout of Paramount's stake in Viacom18. Disney, on the other hand, aims to reduce its exposure in India by diluting its stake in the merged entity.
Leadership and Assets
Uday Shankar, along with James Murdoch, is expected to lead the merged entity. The combined entity will operate over 100 TV channels, including Star Plus, Colors, and Star Sports, along with streaming platforms Disney+ Hotstar and JioCinema.
Sports Broadcasting
The merger will secure TV and digital rights for major sports properties, including the Indian Premier League, International Cricket Council, and other prominent leagues and tournaments. Both companies have collectively invested $10 billion in the sports business, with significant allocations for IPL and ICC rights.
Regulatory Review
The Competition Commission of India will review the merger, considering the entity's projected market share exceeding 40% in both TV and streaming. The joint venture between Reliance and Disney will own sports assets like the Pro Kabaddi League and the Indian Super League in a 65:35 split.
Industry Impact
The merger comes amidst strategic shifts in the media industry, with Zee Entertainment Enterprises opting out of a $1.4 billion TV sub-licensing deal with Disney Star for ICC tournaments. Additionally, Sony terminated its $10 billion merger agreement with Zee.
