Reliance and Disney Seal Media Merger in India
Posted by admin on 2024-02-26 |
In a recent development within the entertainment
sector, Reliance Industries Limited (RIL) and Walt Disney Co have inked a
definitive agreement to amalgamate their media ventures in India, as per a
report from Bloomberg. Under the terms of the agreement, the media arm of
Reliance and its associated entities are anticipated to possess a minimum of 61
percent stake in the combined entity, with Disney retaining the remaining
portion.
Disney purportedly agreed to divest 61 percent of its
Indian operations to Viacom 18 at a valuation of $3.9 billion (Rs 33,000
crore). Viacom18, in turn, is under the ownership of Reliance Industries
Limited (RIL) Chairman Mukesh Ambani. Earlier this month, there were
indications that Disney had consented to offload 60 percent of its Indian
enterprise to Viacom18. This deal is projected to wield substantial influence
within the Indian media and entertainment landscape.
The preceding month witnessed Sony of Japan retracting
its merger proposal with Zee Entertainment due to discordance over the
leadership dynamics of the envisioned merged media entity. Under scrutiny from
activist shareholder Nelson Peltz for inadequate succession planning, Disney
recently nominated two new directors – James Gormon, CEO of Morgan Stanley, and
Sir Jeremy Darroch, former group chief executive at Sky – in late November.
Concurrently, Walt Disney CEO Iger articulated during an earnings call in
November the company's contemplation of various options, affirming its desire
to reinforce its presence in India and enhance profitability.
This marks Disney's third foray into India, with its
initial engagement in 1993 through an alliance with KK Modi's Group, followed
by an acquisition of a stake in Ronnie Screwvala’s UTV. However, these
endeavors did not unfold as envisioned. Investor sentiment towards Disney's
Indian operations began to wane in 2022 subsequent to the loss of online
streaming rights for the esteemed IPL tournament from 2023 to 2027,
notwithstanding its successful procurement of broadcast TV rights.
The amalgamation of RIL's media assets with Disney's
endeavors signifies a strategic maneuver aimed at fortifying their foothold in
the dynamic Indian market, amidst evolving consumer preferences and
intensifying competition. As the contours of the merged entity take shape,
stakeholders are poised to observe how this transformative alliance reshapes
the trajectory of the Indian media and entertainment sphere.
