In a major step towards dominating the entertainment space in the country, Reliance Industries Ltd and Walt Disney Co. signed a non-binding agreement in London last week, taking the two companies one step forward to their mega-merger, reported The Economic Times.
After signing the term sheet last week in the UK, Reliance and Disney will reportedly be finalising the biggest entertainment and media merger in India in February 2024, having a major impact on the viewing and streaming experience in the country.
The mega-merger, set to massively favour Mukesh Ambani’s Reliance will get finalised to complete all commercial ratifications and regulatory approvals by February, despite Ambani’s company pushing to wrap it up by January, the report said citing sources.
The two parties have been negotiating the deal for months, and the non-binding agreement was signed in London in the presence of Kevin Mayer, a former Disney executive brought back in July by chief executive Bob Iger, and Manoj Modi, a close aide of Mukesh Ambani.
As the Reliance-Disney Star deal takes one step forward, the fate of the $10 billion merger between Zee Entertainment Enterprises and Sony Group Corp.’s local unit still remains uncertain. The potential deal was announced two years ago, but is still not close to being finalised by the two parties.
Seeking an extension to take the final calls, ZEEL and Sony Group sought another month to close the deal on the merger. The fate of the deal is expected to be sealed by January 2024.
Details of Reliance-Disney Star deal
Through the mega-merger, Reliance-owned Viacom18 will create a step-down subsidiary which will absorb major stock of Star India, leading to a 51-49 per cent share split between the two companies. Jio Cinema will also be included in the deal.
Reliance is expected to hold a major stake in the merged company, while both RIL is expected to pay cash for the controlling stock in the merged entity. The deal is also expected to give a push to Disney’s OTT app Disney+ Hotstar, which is currently incurring major losses.
One key area of regulatory scrutiny for a Disney-Reliance merger would be their streaming businesses and their power over advertising during the cricket season, expected to change the viewing experience of the sport in India.