Disney In Talks With Mukesh Ambani's Reliance For Mega Indian Media Merger

This story was first published on the Benzinga India portal.

Walt Disney Co. DIS and India's Reliance Industries Ltd are reportedly in advanced negotiations to merge their Indian media and entertainment divisions. A successful merger, spearheaded by Reliance's Mukesh Ambani, could lead to the creation of the South Asian nation's most extensive media enterprise. The proposed merger involves Reliance Industries creating a subsidiary of Viacom18 to incorporate Star India through a stock swap, to secure more than a 51% stake in the new entity. Disney would own the remaining 49%.

As per an ET report, both corporations are discussing a capital infusion plan, expected to range between $1 billion to $1.5 billion, to establish the ownership structure.

The proposed board is set to have equal representation from both RIL and Disney, along with additional seats allocated to the Uday Shankar-led Bodhi Tree and a minimum of two independent directors. However, details of this structure are subject to change over the coming weeks.

See Also: Apple's Already Met A Major Chunk Of Its Promised PLI Scheme Target

Key negotiators include RIL's Manoj Modi and top Disney executives, namely Justin Warbrooke and Kevin Mayer. The objective is to finalize a term sheet as early as the end of January, adhering to a speedy merger timeline. This would then initiate confirmatory due diligence and an official valuation process.

The prospective partnership might secure an exclusive five-year content license for Disney+ originals, with a lock-in period that prohibits the IPO of the merged company. RIL's Jio Platforms are expected to serve as a significant distribution channel.

Viacom18 and Star India have seen varied financial results, with Viacom18's net profit decreasing, and Star India's consolidated net profit falling, despite revenue growth. The merger is aimed at capitalizing on potential synergies, thereby enhancing the long-term value of the businesses.

Photo by Thibault Penin on Unsplash

Read next: Coca-Cola India's First Foray Into Alcoholic Beverages Drops In Goa, Maharashtra: Report