Disney and Reliance Agree To Merger Terms To Create an Entertainment Powerhouse
The Walt Disney Company has moved one step closer to drastically changing the way its Inida business operates.
Disney has now signed a non-binding term sheet with Reliance Industries that would see the two media giants merge. The completion of the deal would create one of India’s largest entertainment entities.
According to Deadline, under the terms of the new deal, Indian billionaire Mukes Ambani’s Reliance group will own 51% of the merged entity through a combination of shares and cash.
Disney, meanwhile, would hold the remaining 49% of the shares.
Kevin Mayer Led Negotiations
The term sheet was reportedly finalized at a meeting last week in London. During those negotiations, Kevin Mayer represented Disney. A former Disney executive, Mayer was brought back to the company by Bob Iger as an advisor.
Reliance, meanwhile, was represented by Ambani advisor Manoj Modi. The two head negotiators had been ironing out the terms of the agreement for months.
While Reliance wants to complete the deal by late January, the merger is expected to be finalized in February.
A Path Forward For Disney
Although Disney+ Hotstar is still the biggest streaming service in India, the streamer has been bleeding subscribers since Disney lost the streaming rights to the Indian Premier League Cricket (IPL).
Disney said the studio has miscalculated the appetite of India’s population to switch from free viewing to premium plans.
“We were bullish on Indian subscribers’ propensity to pay. That’s not worked out,” an internal source told Reuters.
While Disney and Reliance have agreed to the merger terms, a completed deal is far from a certainty. The merger of the two entertainment giants will likely face scrutiny from regulators, who will be weary of creating a streaming powerhouse.
For now, however, today’s news is a win for Disney and Bob Iger, who have created a clear path forward in India.
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