Discussions are underway for a merger between Walt Disney’s India unit and Mukesh Ambani’s media business. The combined entity, if formed, would emerge as a formidable entertainment powerhouse in the country. However, legal experts caution that such a deal would likely attract intense antitrust scrutiny, necessitating the shedding of assets.
Sources reveal that the merger is being explored as a partnership, with Ambani’s group expected to hold a majority stake in the new entity. Both Disney and Reliance boast major streaming services, Hotstar and others, in addition to collectively operating 120 TV channels.
The move is seen as a potential boon for Disney, whose Hotstar streaming app has faced financial challenges. Disney CEO Bob Iger acknowledged the struggles in certain segments of the Indian market, emphasizing the company’s commitment to improving its financial performance.
This potential merger follows closely on the heels of Japan’s Sony revealing plans to merge its India business with Zee Entertainment. The Zee-Sony merger has already undergone a review by the Competition Commission of India (CCI) and may close in the coming weeks. To meet regulatory approval, Zee and Sony have committed to divesting three of Zee’s Hindi TV channels.
Antitrust lawyers warn that the emergence of two media behemoths, Disney-Reliance and Zee-Sony, could result in a duopoly with significant anticompetitive power in India’s $28 billion media and entertainment market. While Netflix and Amazon are already key players in the market, the consolidation of two major entities could lead to increased concentration of market power.
Avimukt Dar, founding partner at India’s IndusLaw, highlighted the potential challenges facing the Disney-Reliance merger, stating, “This deal may get closer scrutiny because of the increased concentration of market power post the Zee-Sony merger. That makes their path to CCI approval more challenging.”
As India’s media landscape undergoes seismic shifts, regulatory bodies and industry stakeholders will closely monitor these developments to ensure a fair and competitive marketplace for advertisers, users, and content creators.