India’s Reliance Industries and Walt Disney have agreed to merge their Indian media businesses, creating an $8.5 billion entertainment giant in the world’s most populous country.
The Indian entertainment market is already one of the largest in the world and this merger is expected to further shake up the multi-billion dollar industry.
In a joint statement, the two companies said they had signed a “definitive binding agreement” to create a joint venture that would combine the operations of Reliance-backed Viacom18 and Star India.
Reliance, the oil and telecommunications conglomerate led by billionaire tycoon Mukesh Ambani, is investing $1.4 billion in the new company. The statement said Disney will hold 36.8 percent, Reliance will hold 16.3 percent and Viacom18 an additional 46.8 percent. His wife Nita Ambani will be its chairperson.
The merger will create an entertainment powerhouse that will have more than 100 TV channels and two streaming platforms.
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The deal will also help Reliance and Disney fend off competition from traditional rivals such as India’s Zee Entertainment and Japan’s Sony, as well as streaming competition from Amazon and Netflix.
The announcement comes less than a month after the $10 billion merger of Sony and Zee closed, which will be a big boost for Reliance and Disney.
Taurani said the merger could help put their streaming platforms on a “path to profitability” in the medium to long term by reducing content costs. Taurani estimates that the combined entity will have a 40 to 45 percent share of the ad revenue market for both traditional broadcast and digital streaming.
