Disney-Reliance deal: What the $8.5B media merger entails
Disney is teaming up with India's largest conglomerate, Reliance Industries, in an $8.5 billion joint venture deal to create a media giant in India. The partnership will put an end to Disney's individual efforts in the country and make Reliance its senior partner. With a market capitalization of $239 billion and rights to the broadcast of immensely popular Indian Premier League cricket matches, this collaboration is set to dominate the media landscape.
Market share and profitability benefits
Together, Disney and Reliance already control around 40% to 45% of the advertising and streaming markets, giving them a significant edge over their rivals. The merged entity will be the biggest name in the Indian media, entertainment and sports sector. It will boast over 100 channels, two leading OTT platforms—JioCinema and Disney+ Hotstar—and a viewer base of over 750 million. Completion of the deal is anticipated around Q4 2024 or Q1 2025.
Deal structure and leadership
As part of the deal, Disney will merge its Indian operations with Viacom18, a subsidiary of Reliance. The new venture will be 63.16% owned by Reliance and Viacom18, while Disney will hold a 36.84% stake. Reliance will pay $1.4 billion to consolidate its control over the joint venture. Nita Ambani, wife of Reliance head Mukesh Ambani, will serve as the chair of the new company, with Uday Shankar, former chairman of Disney India, taking on the role of vice chair.
Disney's losses contributed to the merger with Reliance
Despite growing viewership in India, Disney has found it hard to stay profitable globally. Post COVID-19 pandemic, Disney had 162 million OTT subscribers in India, but by 2022, its global business lost more than $11 billion after purchasing Fox and launching Disney+.
