Reliance, Disney ink non-binding agreement for merger

financialexpress.com:

Reliance Industries Ltd (RIL) and Walt Disney signed a non-binding term sheet in London last week to move ahead with plans to create India’s largest media and entertainment business, said people with knowledge of the matter. The 51:49 stock-and-cash merger in favour of the Mukesh Ambani-led group is expected to get finalised with a view to completing all commercial ratifications and regulatory approvals by February, even though RIL is keen to wrap it up by January end.

Kevin Mayer, a former Disney executive brought back in July by chief executive Bob Iger as an adviser to help him navigate the company’s legacy television business and the ESPN sports network and Manoj Modi, a close confidante of Ambani, were among those present in the meeting. Both have been negotiating for months now to finalise the term sheet document.

Following last week’s signing confirmatory due diligence, a valuation exercise by independent valuers will officially begin and legal and tax advisors will be brought on board. There is likely to be a 45-60 day exclusivity period that can be mutually extended.

The development comes even as the fate of the $10 billion merger between Zee Entertainment Enterprises and Sony Group Corp.’s local unit, the biggest in India media amalgamation announced till date – hangs in balance even after two years.

A Disney India spokesperson declined to comment. Mails sent to Reliance on Saturday evening did not generate a comment till press time Sunday.

The plan, as of now, is to create a step-down subsidiary of RIL’s Viacom18, which will absorb Star India via a stock swap, said the people cited above. Reliance is pitching to be the larger shareholder with at least 51% in the merged company with Disney owning the residual