Disney strikes $8.5bn merger with Reliance in India

Disney and Reliance, the genre-spanning conglomerate, will merge their operations into an $8.5 billion media business. 

Why the merger matters 

In a conclusion to reports of talks, what had been a vital aspect of Disney’s 21st Century Fox acquisition – a big Indian presence – now ends in Disney’s adoption of a ‘can’t beat them so join them’ strategy. 

The move follows years of intense competition across some of India’s most important media properties, including for the rights to the Indian Premier League cricket tournament, where it has formed a centrepiece of Reliance’s powerful ‘flywheel’ strategy. 

For Disney, however, the deal belies a significant writedown of Star India, and the culmination of a longstanding struggle to stem the loss of users from its properties just as content rights grew more expensive. 

For advertising, the outcome very much depends on the regulatory say-so. It’s likely that any eventual joint venture – expected to complete in 2025 – will have significant heft in negotiations with rights owners and advertisers.

What’s going on

Now comprising a combined reach of more than 750m viewers through the union of two major streamers, JioCinema and Disney+Hotstar, the new venture’s ownership structure breaks down as:

• Reliance - 16.34%
• Disney - 36.85%
• Viacom18 (Reliance-backed) - 46.82%

The deal will see the Indian companies streamline their presence in this vast market and improve their case for investment. 

From the top

“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,” explained Disney CEO Bob Iger in a statement. 

“This is a landmark agreement that heralds a new era in the Indian entertainment industry,” says Mukesh D Ambani, chairman and managing director of Reliance Industries. 

“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.” 

Sourced from Disney/Reliance, WARC