Disney Intends To Merge Its Struggling India Division In An $8.5 Billion Deal. Disney is partnering with the wealthiest individual in Asia to address hurdles affecting its streaming venture in India.
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Groundbreaking Development
In a groundbreaking development, the company has announced the merger of its Star India service with Viacom18, backed by Mukesh Ambani’s Reliance Industries, in a substantial $8.5 billion deal. Reliance, led by Mr. Ambani, will spearhead the new venture, positioning itself as one of the leading media entities in India. As part of its commitment to the venture’s growth, Reliance has pledged a substantial $1.4 billion (£1.1 billion).
Mukesh Ambani, with a fortune exceeding $100 billion according to Forbes, hailed the agreement as a “landmark” that signals a new era in the Indian entertainment industry. The deal, subject to regulatory approval, is anticipated to conclude by the end of the current year or early next year. Upon completion, the merged entity is set to offer an extensive network of over 120 channels, catering to an audience of approximately 750 million across the nation.
Viacom18, established in 2007 through a collaboration between Reliance and Paramount, currently manages around 40 channels, including popular ones such as MTV, Nickelodeon, Colors (Hindi-language), and the JioCinema streaming service. The company has been in direct competition with Disney’s Star business in India since Disney acquired a segment of Rupert Murdoch’s Fox empire in 2019.
Disney’s Hotstar Streaming
In 2022, Reliance outbid Disney for the streaming rights to the highly sought-after India Premier League cricket tournament, leading to a substantial decline in subscribers for Disney’s Hotstar streaming service. The Star sports channels under Disney also faced challenges, reporting declines in both subscribers and advertisers in the 12 months leading up to September 2023.
Disney CEO Bob Iger emphasized that the joint venture would maintain Disney’s presence in the significant Indian market, benefiting from Reliance’s profound understanding of the Indian market and consumers. Despite this, sources revealed that the deal values Star India at less than a third of its 2019 valuation when Disney acquired the business.
Under the terms of the agreement, Disney will retain an approximate 37% stake in the joint venture, obtaining exclusive distribution rights for its films and productions in India. Viacom18 will hold a roughly 47% share, with Reliance securing the remaining 16%.
The Indian streaming landscape has become a crucial battleground for major players such as Netflix and Amazon, each investing significantly to tap into the rapidly expanding market. Nita Ambani, wife of Mukesh Ambani, is set to serve as the chairperson of the newly formed company.
