“Groundbreaking Partnership: Reliance and Disney Join Forces in India Media, Creating $8.5 Billion Joint Venture”

Reliance Industries, its subsidiary Viacom18, and Disney India are coming together to merge their media businesses in India. Through this partnership, the three entities will create the largest media conglomerate in the South Asian market. As part of the deal, Reliance will maintain control and ownership of 16.34% of the joint venture, which has been valued at a whopping $8.5 billion. Disney will hold a 36.84% stake in the merged entity, while Viacom18, which is backed by Paramount Global and James Murdoch’s Bodhi Tree, will have a 46.82% stake.

With Reliance being the most valuable firm in India, this move will offer the perfect opportunity for the company to expand and streamline its presence in the fast-growing Indian market. The conglomerate currently owns over 60% of Viacom18 and has plans to invest $1.4 billion into the joint venture to further its growth strategy.

For Disney, this merger comes as a bittersweet moment. The company had previously estimated its India business to be valued at around $16 billion. In a recent SEC filing, Disney stated that the joint venture will incur a non-cash pre-tax impairment of $1.8 billion to $2.4 billion, with approximately half of it being a write-down of the net assets of Star India, in the current quarter.

The strategic merger of Reliance and Disney India also brings together two leading Indian streaming platforms – JioCinema and Disney+Hotstar. The joint venture will provide access to numerous TV channels owned by Disney and exclusively hold rights to their movies and other productions in India, along with an additional 30,000 assets.

This merger will give Reliance dominance in the sports and entertainment industry, strengthened by Jio’s recent acquisition of sports rights from Disney/Star. Together, the combined unit is anticipated to reach an audience of over 750 million viewers across India.

“This is a landmark agreement that marks the beginning of a new era in the Indian entertainment industry,” said Mukesh Ambani, Chairman and Managing Director of Reliance Industries, in a statement. “We have always admired Disney as the best media group globally and are extremely excited to form this strategic joint venture, which will allow us to bring together our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to Indian audiences. We are pleased to welcome Disney as a key partner of the Reliance group.”

The merger between the three companies comes at a time when Disney’s Hotstar has faced fierce competition from JioCinema. Last year, JioCinema even managed to attract top Disney talent to boost its platform. Moreover, Viacom18 outbid Disney’s $3 billion offer for five-year streaming rights to India’s beloved cricket tournament, the Indian Premier League, setting new viewing records for Hotstar within just one year. (Interestingly, Disney paid the same amount for the TV rights.)

“India is the world’s most populous market, and we are thrilled about the opportunities that arise through this joint venture to create long-term value for the company,” said Disney’s Chief Executive, Bob Iger, in a statement. “Reliance has extensive knowledge of the Indian market and consumer, and together, we will build one of the leading media companies in the country, providing consumers with a comprehensive range of digital services and entertainment and sports content.”

The merger also brings back former Star India CEO Uday Shankar and James Murdoch, reuniting the duo with the business they had previously established and managed for ten years. Shankar had left Star India in 2020 due to disputes with Disney, after which he and Murdoch launched Bodhi Tree – a media investment firm in India backed by $1.7 billion from the Qatar Investment Authority. Out of this amount, over $500 million was invested in Viacom18. Shankar now returns as the Vice Chair of the joint venture’s board.

This merger is subject to regulatory and shareholder approval, and both companies expect it to be finalized by the end of March 2025.