Disney Inks $8.5B Deal to Merge India Business With Reliance Industries

Disney is officially merging its India business with Reliance Industries, forming a joint venture that will bring together Reliance’s Viacom18 and Disney’s Star India.

Disney has been exploring options for its India business for months, and the deal with Reliance has been rumored for some time. On Wednesday, the companies made it official.

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Under the terms of the deal, Reliance will invest $1.4 billion into the JV, which is valued at $8.5 billion. Disney will provide a content license to the JV, and “may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals,” the company says. The JV will also have the exclusive right to distribute Disney films and productions in India.

Disney will be a minority shareholder in the new venture, owning just under 37% of the combined companies.

Nita M. Ambani will be the chairperson of the JV, with Uday Shankar as vice chairperson providing strategic guidance to the JV.

Disney has been trying to figure out how best to approach India, the world’s most populous country. It acquired a significant footprint in the country when it bought the Star India stake from 21st Century Fox, but a decision to not to renew streaming rights for cricket impacted its ability to add streaming subs in the market.

In an SEC filing connected to the merger, Disney said it would take a “non-cash pre-tax impairment charges estimated to be between $1.8 billion to $2.4 billion,” reflecting a write-down of the net assets of Star India, as well as write-down of goodwill at the entertainment linear networks reporting unit.

“India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company,” said Disney CEO Bob Iger in a statement. “Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”

“We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment,” added Shankar, the co-founder of Bodhi Tree Systems. “All of us are committed to delivering exceptional value to our audiences, advertisers, and partners. This joint venture is poised to shape the future of entertainment in India and accelerate the Hon’ble Prime Minister’s vision of making Digital India a global exemplar.”

“This is a landmark agreement that heralds a new era in the Indian entertainment industry,” added Mukesh D Ambani, chairman & managing director of Reliance Industries. “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. We welcome Disney as a key partner of Reliance group.”

Updated 7 AM with detail that Disney will be a minority shareholder in the JV.

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