Reliance Industries of India and Walt Disney have struck a deal to merge their media businesses in India, forming an $8.5 billion entertainment behemoth in the world’s most populous nation.
India already boasts one of the largest entertainment markets globally, and this merger is expected to further disrupt the multi-billion-dollar industry.
The agreement entails the formation of a joint venture, combining the assets of Reliance-backed Viacom18 and Star India. Reliance, led by billionaire tycoon Mukesh Ambani, will inject $1.4 billion into the new company.
According to a joint statement by the companies, Disney will hold 36.8 percent, Reliance will have a 16.3 percent stake, and Viacom18 will own 46.8 percent.
Mukesh Ambani hailed the deal as a landmark agreement signaling a new era in the Indian entertainment sector. His wife, Nita Ambani, will chair the new entity.
The merged entity will boast over 100 television channels and two streaming platforms, serving more than 750 million viewers across India and the Indian diaspora.
Disney’s CEO Robert Iger expressed confidence in the partnership, highlighting Reliance’s deep understanding of the Indian market and consumers.
The merger is seen as a strategic move to fend off competition from traditional rivals like India’s Zee Entertainment and Japan’s Sony, as well as streaming giants Amazon and Netflix.
The announcement follows the collapse of a $10 billion merger between Sony and Zee less than a month ago, which would have posed a significant threat to Reliance and Disney.
According to Karan Taurani, senior vice president at Elara Capital, the merger will have a profound impact on the entire media and entertainment ecosystem, potentially putting their streaming platforms on a path towards profitability by reducing content costs.
Taurani estimates that the combined entity could capture 40-45 percent of the advertising revenue market share for both traditional broadcasting and digital streaming, solidifying its dominance in the Indian media landscape.
