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Reliance and Disney Forge $8.5B Entertainment Juggernaut in India

 |  February 28, 2024

Reliance Industries, India’s leading conglomerate, and global entertainment giant Walt Disney announced a merger of their India TV and streaming media assets. The merger, unveiled on Wednesday, creates an $8.5 billion entertainment powerhouse, firmly establishing its dominance in the world’s most populous nation.

Led by Mukesh Ambani, Asia’s wealthiest individual, Reliance Industries is poised to inject $1.4 billion into the merged entity. According to a joint statement issued by both companies, Reliance and its affiliates will collectively hold over 63% stake in the combined entity, while Disney will retain the remaining share, reported Reuters.

For Disney, the merger marks a strategic response to its challenges in the Indian market, particularly stemming from a significant user exodus in its streaming business and financial strain due to substantial payments for Indian cricket rights. This move underscores the complexities foreign businesses encounter in navigating India’s dynamic market landscape.

The merger values Disney’s India business at approximately $3 billion, a stark contrast to the $15 billion valuation when Disney acquired it as part of the Fox deal in 2019. However, a senior Disney source emphasized that the true value of the company’s India assets, factoring in synergies, stands closer to $4.3 billion.

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Together, the combined entity will boast an impressive portfolio of 120 TV channels and two streaming platforms. Furthermore, it secures coveted TV and streaming rights for cricket tournaments, tapping into India’s fervent passion for the sport.

Analysts view the merger as a strategic masterstroke, with Jinesh Joshi, an analyst at India’s Prabhudas Lilladher, noting, “The combined entity will create a sports behemoth in India.” He further emphasized the newfound bargaining power for Reliance in negotiating advertisement contracts and the financial cushion the merger provides for Disney.

According to Reuters, this monumental merger underscores the evolving dynamics of India’s entertainment industry, where collaboration and consolidation pave the path for unparalleled growth and dominance in a fiercely competitive market.

The announcement sends ripples across the global entertainment landscape, signaling India’s emergence as a key battleground for industry giants vying for supremacy in one of the world’s most vibrant entertainment markets. With Reliance and Disney joining forces, the stage is set for a new era of entertainment dominance in India.

Source: Reuters