Taking one step forward towards the biggest entertainment merger in India, Reliance and Disney Star have signed a non-binding agreement in London last week. The mega-merger between Reliance and Disney, as per this agreement, will be finalised in February 2024.
Mukesh Ambani-led Reliance continues to push for the merger to be finalised in January itself, but there are still many details to iron out. The non-binding agreement was singed after months of negotiating between Ambani’s close aid Manoj Modi and Disney’s Kevin Mayer, a former executive brought to the company this year, reported The Economic Times.
It is expected that the Reliance-Disney merger could change the viewing experience in India altogether, especially when it come’s to the country’s most watches sport – cricket.
Reliance-Disney Star deal: 10 things to know about the merger
- Reliance and Disney Star’s deal is expected to the biggest entertainment merger India has ever seen. The merged entity will be equally controlled by both the firms, with equal number of directors from Reliance and Disney.
- The main aim of the merger is the create a subsidiary of Viacom18 (owned by Reliance), which will absorb Star India through a stock swap, reported ET.
- Mukesh Ambani’s Reliance will be the majority shareholder in the merged entity, set to own 51 per cent stake while Walt Disney Co. will own 49 per cent.
- Reliance’s OTT platform Jio Cinema and Disney + Hotstar are also expected to be a part of the deal. The merger is set to uplift Hotstar as it continues to get weighed down by losses.
- Both Reliance and Disney Star are looking to make an investment of over $1.5 billion into the deal, under which Ambani’s firm will gain distribution control of Star India’s channels.
- The Reliance-Disney deal will expand beyond TV channels and OTT platforms, focusing also on their power of advertising especially during the cricket season in India.
- Disney Star showed keen interest in the deal because of the bidding wars between them and Reliance over cricket streaming rights. The US-based firm was also looking to improve its presence in India.
- While Reliance will be the controlling party in the merger, Disney is expected to benefit greatly through the deal as since its TV channels have been turning a profit in India, the same cannot be said for its other companies.
- It is expected that Mukesh Ambani’s eldest son Akash Ambani will be among the board of directors. Another top contender for the seat is Uday Shankar of Bodhi Tree, which holds the largest shares in Viacom18 after Reliance.
- While not much is known about the new entity to be formed after the merger, it is expected that its prime competition will be streaming services like Netflix and Amazon.