Disney and Reliance Forge Mega Merger, Creating Entertainment Powerhouse

Disney and Reliance Industries have inked a non-binding term sheet, paving the way for a mega-merger of their Indian operations. The collaboration, once finalized, would birth one of India’s largest entertainment conglomerates. The deal outlines that Mukesh Ambani’s Reliance group will stake claim to 51% ownership of the merged entity, utilizing a combination of shares and cash. Disney, on the other hand, will retain the remaining 49% of shares.

The agreement was reached during a meeting in London last week, where Disney’s representative, Kevin Mayer, and Reliance’s advisor, Manoj Modi, finalized the non-binding term sheet after months of collaborative efforts. The merger is on track for completion by February, though Reliance aims to expedite the process, targeting late January for the finalization.

Disney’s pursuit of a strengthened position in India aligns with its broader strategy. Facing challenges such as job cuts and investor pressure, Disney aims to fortify its presence in the Indian market and improve its financial performance. The integration of Hotstar, acquired as part of the 2019 acquisition of 21st Century Fox assets, played a pivotal role. Disney+ Hotstar, a significant global streaming service for Disney, faced setbacks after losing the Indian Premier League Cricket rights to JioCinema in a $2.9 billion deal last year.

Disney executives admitted to underestimating the reluctance of Indian consumers to shift from free to premium plans. Despite the setback, the impending merger with Reliance positions Disney strategically, leveraging the strengths of both entities to create a media and entertainment powerhouse.

This development unfolds against the backdrop of the pending $10 billion merger between Zee Entertainment Enterprises and Sony Group Corp.’s local unit, a proposal that, after two years, remains unresolved and has the potential to become the largest media amalgamation in India.