Reliance, Disney Complete Merger

After months of anticipation, Reliance Industries Ltd (RIL), Viacom18 and The Walt Disney Company have announced the merger of their media business. With this, the media and JioCinema businesses of Viacom18 have been merged with Star India.

The transaction valued the joint venture (JV) at $8.5 Bn (INR 70,352 Cr) on a post money basis, “excluding synergies”. While Viacom18 will control 46.82% stake in the JV, Disney will hold 36.84% stake. RIL will hold the remaining 16.34% stake in the JV. 

While Nita Ambani will serve as the chairman, Uday Shankar will serve as the vice chairperson of the JV. 

It is pertinent to note that RIL has invested $1.4 Bn (INR 11,500 Cr) in the JV for its growth.  

The entertainment business of the JV will be headed by Viacom18’s CEO Kevin Vaz and the combined digital organisation will be led by Viacom18’s Kiran Mani. Head of sports for Star & Disney India Sanjog Gupta will lead the combined sports organisation. 

The JV will feature a merger of RIL’s JioCinema and Disney’s Hotstar on the digital front and Star and Colors on the television side. 

“With the formation of this JV, the Indian media and entertainment industry is entering a transformational era. Our deep creative expertise and relationship with Disney, along with our unmatched understanding of the Indian consumer will ensure unparalleled content choices at affordable prices for Indian viewers,” RIL chairman and managing director Mukesh Ambani said. 

In a joint statement, the companies said that the JV operates over 100 TV channels, producing over 30,000 hours of TV content annually. Further, JioCinema and Hotstar digital platforms have an aggregate subscription base of over 50 Mn.

Last month, it was reported that the combined entity will keep Disney+ Hotstar as its sole streaming platform. As per reports, Reliance had mulled various strategies for integrating the two streaming platforms, including a plan to subsume Disney+ Hotstar into JioCinema. It also explored a plan to operate two separate platforms, with one focussing on sports and the other on entertainment.

The statement said that the JV will be one of the largest media and entertainment companies in India with pro forma combined revenue of approximately INR $3.1 Bn (INR 26,000 Cr) for the fiscal year 2023-24 (FY24). 

Given the giant size of the resultant entity, the deal had to climb multiple regulatory firewalls. While the Competition Commission of India (CCI) approved the merger on August 27, the National Company Law Tribunal (NCLT) gave its approval on August 31. 

The statement said that the merger deal also received approval from antitrust authorities in the EU, China, Turkey, South Korea and Ukraine.

Ahead of the merger, JioCinema froze its content budget and stopped signing agreements with producers, Inc42 learnt from industry sources.

On the other hand, Disney saw a number of top-level exits in the run up to the merger. Disney+ Hotstar executive vice-president and chief marketing officer Sidharth Shakdher left the company earlier in the year to join Ola Consumer. However, he later quit the EV maker to join Paytm.

Further, Disney+ Hotstar’s head Sajith Sivanandan also stepped down amid the integration efforts.