Disney and Reliance Media Are Nearing a Massive Merger
The Walt Disney Company and Reliance Industries Ltd are expected to sign a non-binding agreement soon that will merge the two media operations.
According to people familiar with the agreement, it will be a cash-and-stock deal.
Photo: Hindustan Times
Reliance Industries Ltd. is owned by Asia’s richest tycoon, Mukesh Ambani, who will infuse money to hold at least 51% of the merged entity if the deal goes through.
Disney will hold the rest of the merged companies’ stake. The new entity will be one of the largest media conglomerates in India.
Nothing is Final
After the agreement is signed, the diligence and valuation exercises will begin. That process will determine how much money Reliance will invest in the business.
While it looks like the two sides are heading for a deal, no final decision has been made, and either party can call off the transaction.
A Win-Win For Both Parties
In the end, an agreement between Disney and Reliance will be beneficial to both parties.
For Ambani, the deal marks his latest conquest in the country’s entertainment sector. Reliance has already acquired rights to the Indian Premier League and the rights to broadcast HBO shows in India.
FILE PHOTO: Mukesh Ambani, chairman of Reliance Industries Limited, poses for photographers before addressing the annual shareholders meeting in Mumbai, India, June 12, 2015. REUTERS/Shailesh Andrade
Disney, meanwhile, will now be able to limit its exposure in India while still keeping a foothold in the country.
“We have an opportunity to strengthen our hand,” Bob Iger has previously said. “We also are looking to see whether we can strengthen our hand and, obviously, improve the bottom line.”
Photo: Chip Somodevilla/Getty Images
If a deal is consummated, Disney will have done precisely what Iger wanted.
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