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Disney-Reliance Merger headed towards completion

Walt Disney and Reliance Industries sign non-binding deal to merge their media businesses in India, aiming for January completion pending approvals.

Disney+ Hotstar

It is reported that a non-binding deal has been signed between Walt Disney and Reliance Industries to combine their media businesses in India. 

Reliance-Disney Merger Aims for January Completion

According to sources quoted by The Economic Times, the conglomerate, run by Mukesh Ambani, hopes to complete the procedure by the end of January, subject to regulatory approvals. The deal is expected to be finalized by February. Reliance will own 51% of the combined company through a combination of cash and shares as part of the transaction, with Disney holding the remaining 49%. As difficulties arose with Disney’s content negotiations with HBO and WBD, rival Reliance’s JioCinema and Disney+ Hotstar recognized a chance to work together. JioCinema improved its position in the Indian OTT market by seizing the opportunity to add these shows to its site and even providing free streaming of the most recent IPL cricket competition. 

Merger Reshapes Indian Entertainment Landscape

One of India’s biggest entertainment companies is expected to emerge from the proposed combination of Reliance and Disney, opening the door for competing with Zee Entertainment, Sony, Netflix, and Amazon Prime. Reliance is already a major force in the Indian entertainment industry due to its TV channels and media unit Viacom18. The upcoming Reliance-Disney deal has the potential to completely transform television viewing in addition to having an impact on the OTT market. The companies are now completing the remaining few merger specifics.

Top Advisors Lead Reliance-Disney Merger Talks

Manoj Modi, a major counselor to Mukesh Ambani, and Kevin Mayer, a former Disney executive who CEO Bob Iger reappointed as an advisor in July, led the negotiations. Mayer, who had previously worked at Disney, was in charge of Candle, a media company that Blackstone helped to form. The two spent months working to conclude the agreements.

According to ET, following last week’s signing, an official appraisal process is scheduled to begin, and legal counsel will examine the specifics. A 45–60 day exclusivity term could be possible, with the possibility of mutual extension. According to sources cited by ET, there is talk of creating a step-down subsidiary of RIL’s Viacom18 to exchange stocks and absorb Star India. RIL is expected to pay cash for almost all of the stock, treating both businesses as being of comparable size. The agreement is anticipated to include Jio Cinema as well.

As a portion of the capital investment, both firms are expected to provide cash, with an estimated range of $1 to 1.5 billion. The article states that at least two directors each from Reliance and Disney are expected to be on the forthcoming board. With a 15.97 percent interest in Viacom18, Bodhi Tree, chaired by Uday Shankar, is the second-largest stakeholder and a candidate for a board position. It is being considered to include a minimum of two independent directors; however, this may change in the upcoming weeks.

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