India’s top conglomerate Reliance Industries and Walt Disney announced the merger of their India TV and streaming media assets, forming an $8.5 billion entertainment juggernaut.
Reliance, led by Asia’s richest man, Mukesh Ambani, will inject $1.4 billion in the merged entity, with the company and its affiliates holding a more than 63% stake, with Disney owning the rest, the companies said in a joint statement.
Media rivals
With two streaming platforms and 120 TV channels, the combined company will be a formidable opponent for competitors like Netflix and Sony of Japan in the $28 billion media and entertainment market, which is expected to grow to $100 billion by the end of the decade.
Disney’s lengthy battle to stop users from leaving its collapsing Indian streaming service and the financial burden resulting from billion-dollar payments for Indian cricket rights before the deal, providing yet another illustration of how difficult it can be for Western companies to expand in India.
Ultimate alliance
“The combined entity will create a sports behemoth in India,” stated Jinesh Joshi, an analyst at Prabhudas Lilladher in India.
“This merger will give Reliance great bargaining power when it comes to negotiating advertisement contracts … For Disney, coming together with a bigger player, in terms of (financial) pockets, will give it a cash cushion,” he continued.
According to the corporations, the combined company will serve the approximately 750 million viewers in India as well as the Indian diaspora worldwide.
According to Disney CEO Bog Iger’s statement, “Reliance has a deep understanding of the Indian market and consumer,” and the acquisition will enable “us to better serve consumers with a broad portfolio of digital services, entertainment, and sports.”
