Disney, Reliance finalizing merger terms in Disney+ Hotstar, Star India deal: Report

India’s most valuable company Reliance Industries and Walt Disney are finalizing details of a non-binding term sheet to merge their Indian media operations, the Economic Times reported on Tuesday, citing officials involved in the deal.

Under the current terms of the agreement, likely to be announced in January, a newly formed unit of Reliance’s Viacom 18 is to absorb Disney’s Star India through a share swap deal, the report said.

Mukesh Ambani-led Reliance may pay cash for a 51 per cent stake in the proposed Viacom18 entity, while Disney holds 49 per cent, ET said. According to the newspaper, both parties are expected to have equal representation on the unit’s board.

Disney and Reliance did not immediately respond to Reuters requests for comment.

Reliance, whose broadcasting venture Viacom18 runs JioCinema, was reported by Bloomberg in October to be valuing Disney’s India assets, which include the Disney+ Hotstar streaming service and Star India, at $7 billion (about Rs 58,369 crore. Between Rs.) and $8 billion (approximately Rs. 66,707 crores).

At the time, Disney valued the operation at $10 billion (approximately Rs 83,384 crore).

In October, private equity firm Blackstone was in preliminary discussions with Walt Disney to acquire a stake in the Indian arm of the entertainment firm. Candle Media, a Blackstone-backed US media firm founded by former Disney executives, had led negotiations between the two parties.

Bloomberg News previously reported that Disney has also been in talks with Indian billionaire Gautam Adani and Sun TV Network owner Kalanithi Maran.

With subscriber numbers booming, Disney has tried to revive the fortunes of its streaming business in India by offering free cricket on smartphones, betting that the strategy will boost advertising revenues.

Meanwhile it has lost the streaming rights of some major cricket tournaments – including the Indian Premier League and the national cricket team’s bilateral matches – to Indian billionaire Mukesh Ambani’s broadcasting arm.

© Thomson Reuters 2023

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