Disney, Reliance merger discussions reach last lap as Feb 17 exclusivity deadline draws near
Walt Disney Co and Reliance Industries (RIL) are in the last leg of negotiations to finalise their mega stock-and-cash merger to create India’s largest media and entertainment business, said people in the know.
Under the terms of the talks, Viacom18 looks set to be the single largest shareholder, with 42-45% in the combined entity, they said.
Parent RIL is expected to invest up to $1.5 billion cash in the new entity and pick up a stake directly as well. As a group, Mukesh Ambani-led RIL will own 60%, with Walt Disney owning the remaining 40%.
Reliance executives are also working on their three-year capital allocation programme for all businesses to be presented shortly to the board. The media business will be a key part of growth plans, said the people cited above.
The proposal, as of now, is to create a step-down subsidiary of Viacom18 Media, which will absorb Star India via a stock swap, they said. Both businesses are being treated as similar-sized ones, valued at $4-5 billion each, so RIL will be paying cash for the controlling stake.
Eager to Consolidate
Jio Cinema, a part of Viacom18, will be included in the deal.
Disney’s valuation of the India business has fallen sharply from what it was pegged at when the Murdoch family crown jewel was acquired in 2019. This is largely on account of the mounting losses of Disney’s sports franchise in India, analysts said.
Viacom18’s entertainment network in the country is a partnership between Ambani’s TV18 Broadcast, Paramount Global and Bodhi Tree Systems.
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