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Reliance, Disney announce merger, Nita Ambani to head merged entity

By virtue of a legally binding agreement, Reliance Industries Limited and Walt Disney Company have agreed to merge their media operations, resulting in a transformation of the TV and streaming media sector in India. This merger will establish an entertainment juggernaut worth $8.5 billion. The operations of Star India and Viacom18 will be consolidated under the joint venture (JV), with the media division of Viacom18 merged into Star India Private Limited in accordance with a scheme of arrangement approved by the court. TV18 Broadcast, which is a subsidiary of Network18 Media & Investments, in which RIL maintains a 73.15% stake, is the parent company of Viacom18. This morning, shares of TV18 and Network18 each declined 5%, whereas reliance opened positive.

The entity formed by the merger of Reliance and Disney would involve the integration of esteemed media assets in the fields of entertainment and sports. Prominent brands including Sports18, Colors, StarPlus, StarGOLD, and Star Sports will be consolidated under one structure. Additionally, attendees will have the opportunity to watch much-anticipated events via platforms such as JioCinema and Hotstar. In the streaming arena, Reliance's JioCinema and Disney's Hotstar merge to offer an extensive library of over 200,000 hours of content, spanning from television dramas to blockbuster movies and sporting events. The merged entity will have 120 TV channels and two streaming platforms (JioCinema and Disney's Hotstar), making its business much larger than competitors and possessing a combined reach of over 750 million viewers across India and the Indian diaspora worldwide.

Disney's Hotstar, ranked as the second-most downloaded video streaming app in India in 2022, features a strong lineup of global blockbusters, including content from the Marvel universe and National Geographic documentaries. In contrast, JioCinema won the streaming rights for the IPL until 2027 through a fiercely bidding process, superseding Disney. Additionally, Warner Bros. and The Pokemon Company have signed agreements with JioCinema to bolster its content library.

Being the leading broadcast network in India, it will possess a substantial portion of the television viewership and advertising market. Its portfolio will feature strong positions in digital streaming platforms, sports categories, and Hindi viewership.

Following the completion of the merger, the JV will be predominantly controlled by RIL, with 16.34 percent of the JV owned by Reliance, 46.82 percent owned by Viacom18, and 36.84 percent by Disney. Reliance and its affiliates will collectively own an interest in the company exceeding 60%. According to the exchange filing, Reliance has consented to invest Rs 11,500 crore in the JV, and Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals. The transaction is subject to regulatory, shareholder, and other customary approvals and is expected to be completed in the last quarter of 2024 or the first quarter of 2025.

Mukesh D. Ambani, Chairman & Managing Director of Reliance Industries, said, "This is a landmark agreement that heralds a new era in the Indian entertainment industry. We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation.

Mrs. Nita M. Ambani will be the Chairperson of the JV, with Mr. Uday Shankar as Vice Chairperson providing strategic guidance to the JV.

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