Reliance, Disney merger set to create entertainment juggernaut

It’s official now: Reliance Industries Limited (RIL) and The Walt Disney Company have signed binding definitive agreements to form a joint venture, leading to the formation of India's biggest entertainment and sports juggernaut.

Announcing this on Wednesday, RIL said the media undertaking of Viacom18 will be merged into Star India Pvt Ltd while the total valuation of the JV is pegged at Rs 70,352 crore ($8.5 billion) on a post-money basis excluding synergies.

RIL will invest Rs 11,500 crore ($1.4 billion) into the joint venture as Nita Ambani, wife of Mukesh Ambani, will be chairperson of the merged entity and former top Disney executive Uday Shankar will serve as vice-chairperson.

Post completion, the new venture will be controlled by RIL and owned 16.34 per cent by RIL, 46.82 per cent by Viacom18 and 36.84 per cent by Disney. The transaction is subject to regulatory, shareholder and other customary approvals and is expected to be completed in the last quarter of the calendar year 2024 or the first quarter of the calendar year 2025. Goldman Sachs is acting as a financial and valuation advisor.

It will be an umbrella body of leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sport (e.g. Star Sports and Sports18) including access to marquee events across television and digital platforms through JioCinema and Hotstar, the company said.

The JV will have over 750 million viewers across India and will also cater to Indian diaspora across the world, while bids for media rights for sports products will virtually cease to exist after the merger.

Speaking about the merger, RIL CMD Mukesh Ambani said: ‘’This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally, and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.’’

Bob Iger, CEO of The Walt Disney Company, said: "India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company. Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content."

Uday Shankar, co-founder of Bodhi Tree Systems said: “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment. All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”