Merger could create a new media behemoth in India's $28 bln market.
Billionaire Mukesh Ambani's Reliance is close to merging its India media business with Walt Disney. The deal, which WSJ says will close this month, values Disney’s India unit at $3.9 billion, the report said, less than half of what Disney had originally hoped.
The deal will strengthen Reliance's hold over India's $28 billion media and entertainment market, especially after a separate $10 billion merger deal between Japan's Sony and India's Zee Entertainment collapsed last week.
According to the agreement, Disney will retain 40% ownership in its India unit, whereas Reliance will acquire a 51% stake and Bodhi Tree (a joint venture between James Murdoch and a former Disney executive, Uday Shankar) will hold 9%.
Reliance and Disney have been in talks for months to create an entertainment superpower in the world's most populous nation.
Under the deal being discussed, Viacom18, the broadcast division of Ambani's Reliance Industries, will merge with Disney's India businesses. Viacom18's shareholders include Paramount Global as well as Bodhi Tree, which invested $500 million in the Indian company last April. Shankar also serves on Viacom18's board.
A deal could be closed by mid-February, the sources said. One of the executives said Viacom18 was also likely to infuse some cash in the merged entity.
Disney’s TV and streaming business in India has struggled over the years, with its digital platform especially facing a user exodus in stiff competition over cricket streaming with Ambani's plaforms.
The U.S. firm's streaming service lost nearly 34% of its subscribers between October 2022 and August 2023, as Ambani started offering free cricket on his new streaming platform after out-bidding Disney for the Indian Premier Legaue (IPL) cricket tournament rights.
Disney misjudged Indians' willingness to pay, Disney sources have said, and the company recently changed tack by offering free cricket on smartphones, hoping the strategy will boost advertising revenue and offset the impact of a subscriber exodus.