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Reliance, Disney sign $8.5 bn deal to form Joint Venture

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Walt Disney Co. and Reliance Industries Ltd. have finalized an $8.5 billion agreement to merge their media operations in India, forming a joint venture that will wield significant influence in the Indian entertainment landscape. The collaboration will see Disney’s Star India unit amalgamated with Reliance’s Viacom18, with Reliance injecting $1.4 billion to secure a 63% controlling interest in the venture, leaving Disney with the remaining stake.

This strategic partnership grants the new entity exclusive rights to distribute Disney’s extensive portfolio of films and productions throughout India, allowing them to reach an audience of over 750 million viewers across the nation. Nita M. Ambani will assume the role of chairperson for the joint venture, while former Disney executive Uday Shankar is slated to serve as vice chairperson.

Anticipated to be finalized by either the last quarter of 2024 or the initial quarter of 2025, this merger signifies a significant development in the Indian media landscape, poised to reshape the entertainment industry in the region.

The Disney-Reliance deal in India has significant implications for the Indian media industry. Here are some key points:

Market Impact: The merger of Disney’s Star India with Reliance’s Viacom18 creates a joint venture valued at $8.5 billion, which will be a major player in the Indian entertainment market, commanding a 40% market share.

Content Portfolio: The joint venture will have exclusive rights to distribute Disney films and productions in India, with access to over 30,000 Disney content assets, providing a diverse range of entertainment options for consumers.

Regulatory Attention: The deal is likely to attract regulatory scrutiny due to its potential impact on the Indian media and entertainment landscape.

Leadership: Nita M. Ambani will chair the joint venture, and former Disney executive Uday Shankar will serve as vice chairperson, bringing together expertise from both companies.

Digital Transformation: The joint venture aims to lead the digital transformation of the media and entertainment industry in India by combining expertise, technology, and content libraries to provide innovative digital entertainment experiences.

Competition: The merged entity will challenge rivals such as Sony and Netflix in India’s media landscape, with 120 TV channels and two streaming platforms under its umbrella.

Stakeholder Distribution: Reliance Industries will own 16.3% of the merged entity, Viacom18 will own 46.8%, and Disney will own 36.8%, indicating a strategic distribution of stakes among the partners.

Overall, this deal signifies a significant consolidation within the Indian media industry, creating a powerhouse that aims to reshape the entertainment landscape in India and cater to the evolving demands of consumers in the digital age.

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