Reliance Industries Limited Ltd. and Walt Disney Co. have signed a binding agreement to merge their media businesses in India, Bloomberg reported.
According to sources, the media division of Reliance, under the ownership of billionaire Mukesh Ambani, and its associated companies are projected to hold a minimum of 61 per cent in the combined entity, while Disney will retain the remaining stake.
The deal, expected to be announced this week, will see the coming together of former rivals Reliance’s media arm Viacom18 and Disney’s media businesses in India. The deal is expected to strengthen Reliance's position in the Indian media market, especially in the backdrop of the cancellation of local Zee Entertainment's $10 billion merger deal with Japan's Sony.
Reliance on Tuesday issued a clarification on the stock exchanges regarding its reported merger deal with Disney, saying it won't be able to comment on “media speculation.”
It is likely to alter the media landscape, posing a stiff contest to competitors such as Zee Entertainment Enterprises Limited, Sony Pictures Networks India (SPNI), SUN TV Network, Netflix, Amazon Prime Video, and others, and possibly sparking off consolidation.
The two companies, which had a combined revenue of Rs 25,000 crore in FY23, will corner 40% market share in the linear TV and OTT markets. The combine will also become the biggest player in sports, holding rights to marquee cricket properties such as the Indian Premier League, International Cricket Council rights for men’s and women’s global events, and BCCI’s India bilateral matches across TV and digital platforms.
As pointed out by Indian experts, increasing concentration in the television sector may worry the Competition Commission of India (CCI). Viacom18's 38 channels include Comedy Central and Nickelodeon, while Disney, whose Star brand has been a household name for decades in India, has 80. Elara Capital estimates Disney and Viacom18 together will have the biggest share of the TV ads market at 43%.
The CCI should also take into account the market shares of the parties in the Hindi, Marathi and Bengali languages entertainment channels sector. If it exceeds 40-50% in any market, CCI is likely to conduct a detailed investigation.
Sources: Business Today, The Economic Times
