Reliance Industries Limited (RIL) and Disney India on Wednesday 28th February announced a significant merger deal. After months of negotiations, the agreement is expected to be formalized this week.
Under this arrangement, the combined entity will be overseen by the Ambani family of Reliance, with Nita Ambani chairing the board alongside former Disney India chief Uday Shankar as vice-chairperson.
On Thursday, the share prices of RIL rose as much as 1.5% in early trade after the news of the merger with Walt Disney India made headlines.
According to reports, Reliance shares were trading 1.16% higher at Rs 2,942.80 on the Bombay Stock Exchange (BSE) at around 10:23 am.
Both entities released a joint statement, saying that the merged entity will be valued at $8.5 billion or over Rs 70,000 crore, positioning it as the dominant player in the industry.
Reliance and its associates will own a combined stake of over 60% in the joint venture, while Disney will own roughly 37%.
The statement added that under the agreement, Viacom18’s media operations will be integrated into Star India Private Limited (“SIPL”) via a court-sanctioned arrangement.
Furthermore, the statement outlines that as part of the agreement, Viacom18’s media operations will be amalgamated into Star India Private Limited (“SIPL”) through a court-approved arrangement.
According to Reuters, Reliance will hold a majority stake of approximately 51-54% in the merged business, valuing Disney’s assets at around $3.5 billion. This valuation marks a notable decrease from the $16 billion valuation estimated in 2016. Disney, on the other hand, will retain around 40% ownership. Additionally, Bodhi Tree, led by James Murdoch and Uday Shankar, will hold approximately 9% stake in the new entity.
This merger is poised to create a dominant force in the Indian media landscape, leveraging the combined assets of Reliance and Disney India, including the popular Disney+ Hotstar streaming service. Reliance Industries boasts a diverse portfolio of media offerings through its Viacom18 group, JioCinema streaming platform, pay-TV services, and an extensive network of over 100 linear TV channels.
About Author
Leave a Reply