Reliance, Disney Set To Create India's Largest Media Conglomerate With Viacom18-Star India Merger, Here's All About It

Reliance Industries and The Walt Disney Company have reportedly reached a binding agreement to merge Viacom18 and Star India, creating India's largest media conglomerate encompassing TV broadcasting, streaming, movies, and sports, as per a report by The Economic Times.

The deal, expected to be announced early this week, follows over four months of negotiations.

The two companies, which collectively generated revenue of Rs 25,000 crore in FY23, are expected to announce the merger with Reliance potentially owning 61 per cent of the combined entity, Disney holding 33 per cent, and Bodhi Tree Systems holding the remaining 6 per cent.

Despite being the larger entity, Disney's Star India has seen its valuation drop to approximately $4 billion, partly due to anticipated losses in its sports business.

Viacom18, valued at around $4 billion after receiving over Rs 15,000 crore from Reliance and Bodhi Tree in April last year, is set to see Paramount Global exit the company, with Reliance acquiring its stake.

Reliance is expected to invest $1-$2 billion, primarily to infuse funds into the merged entity and to buy out Paramount's stake.

Disney may reduce its India exposure by diluting its stake, focusing instead on strengthening its position in the US.

The merged entity, led by Uday Shankar, is set to become a dominant player in TV broadcasting with over 100 channels including Star Plus, Colors, and Star Sports, as well as two streaming platforms, Disney+ Hotstar and JioCinema.

The merger is expected to face scrutiny from the Competition Commission of India due to the combined entity's market share exceeding 40 per cent in both TV and streaming.

The entity will also hold key sports properties such as the Pro Kabaddi League and the Indian Super League.

With combined investments of $10 billion in the sports business, including $6 billion for IPL rights alone, the entity will have TV and digital rights to major sports properties globally.

This development follows the collapse of the proposed merger between Sony Group-Culver Max Entertainment and Zee Entertainment last month.