India’s largest conglomerate Reliance Industries and the Walt Disney Company have announced an $8.5bn deal to merge their Indian television and streaming media assets.
Reliance, led by Asia’s richest man Mukesh Ambani, will invest $1.4 billion in the merger, controlling a 63 per cent stake in the new company, while Disney will own about 37 per cent of the new company, which is valued at $8.5 billion, the two companies said in a joint statement.
The merger aims to become the country’s leading streaming entertainment and sports content channel as it combines media assets including Star India, which Disney acquired in 2019 as part of its $71 billion deal to buy Fox from Rupert Murdoch.
For Disney, the merger was the result of a long struggle with user churn from its bleeding Indian streaming business and financial strain caused by billion-dollar payments for the rights to Indian cricket – another example of how difficult it can be for foreign companies to grow in India.
The deal also came at a time when Disney worldwide is facing pressure to rationalise its business. Bob Iger returned to Disney in November 2022 as chief executive, less than a year after his resignation, and has since restructured the company to make the business more cost-effective.
Mr. Iger said in November that the company wanted to stay in India but was considering options. Disney has internally admitted it misjudged the Indian market, company sources told Reuters earlier.
Reliance and Disney each have one streaming service and 120 television channels, and the deal is expected to strengthen Reliance’s position in India’s $28 billion media and entertainment market. The new platform will also get exclusive rights to distribute Disney films and products in India, as well as licence over 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer, the press release said.
With the new merger, the conglomerates will be able to reach over 750 million viewers across the country as well as “the Indian diaspora worldwide”, setting the stage for stiff competition with Japanese companies such as Sony, Netflix and Amazon Prime Video.
