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Ten Key Points To Know From The 'Game-Changing' Reliance-Disney Star Mega Merger

image-lqktqjnbMukesh Ambani, Chairman and Managing Director of Reliance Industries(X.COM)

Mukesh Ambani's Reliance Industries and Disney Star have officially sealed their commitment through a non-binding agreement in London, a major development in India's entertainment scene. This strategic alliance, set to culminate in a mega-merger by February 2024, marks a significant shift in the country's media landscape, assuring transformative changes in how audiences engage with content through streaming services.

Despite Ambani's push for an expedited finalization in January, the merger's completion hinges on obtaining necessary commercial and regulatory approvals. The agreement's details, emerging after extensive negotiations led by key figures like Manoj Modi and Disney's Kevin Mayer, demand careful resolution.

Simultaneously, uncertainties surround the fate of the previously initiated $10 billion Zee Entertainment-Sony Group merger, launched two years ago. In another move, Reliance's Viacom18 is poised to establish a subsidiary by incorporating Star India in a 51-49 split.

Regulatory attention focuses on potential streaming dominance and advertising impact during cricket seasons, emphasizing the transformative influence this collaboration could wield over India's sports viewing experience.

This pivotal agreement between Reliance and Disney Star marks a noteworthy step towards industry consolidation and underscores the dynamic shifts occurring in India's entertainment landscape. The amalgamation of these industry giants holds the potential to usher in a new era, with broad-reaching effects resonating across various aspects of the country's entertainment scene.

Reliance-Disney Star Mega Merger: 10 Key Points to Understand

  1. Major Entertainment Merger: The collaboration between Reliance and Disney Star is poised to become India's most substantial entertainment merger, with both companies sharing equal control over the merged entity.
  2. Viability of Viacom18 Subsidiary: The primary goal of the merger is to establish a Viacom18 subsidiary (owned by Reliance) through a stock swap, absorbing Star India in the process, as per reports from ET.
  3. Shareholder Distribution: Mukesh Ambani's Reliance will emerge as the majority shareholder, holding a 51% stake, while Walt Disney Co. will have 49% ownership in the merged entity.
  4. Integration of OTT Platforms: Reliance's Jio Cinema and Disney+ Hotstar are anticipated to be integrated into the deal, potentially boosting Hotstar's standing amid ongoing losses.
  5. Significant Investment: Both companies are set to invest over $1.5 billion in the deal, granting Ambani's firm distribution control over Star India's channels.
  6. Diversified Advertising Influence: Beyond TV channels and OTT platforms, the Reliance-Disney deal aims to leverage advertising power, particularly during the lucrative cricket season in India.
  7. Strategic Interest of Disney Star: Disney Star's interest in the deal stems from previous bidding wars with Reliance over cricket streaming rights, indicating a desire to enhance its presence in India.
  8. Control Dynamics: While Reliance takes the lead in controlling the merger, Disney stands to benefit significantly, especially considering the profitability of its TV channels in India.
  9. Board of Directors Inclusion: Mukesh Ambani's eldest son, Akash Ambani, is expected to join the board of directors, along with the potential inclusion of Uday Shankar from Bodhi Tree, a major shareholder in Viacom18.
  10. Competition in Streaming Services: The newly formed entity, details of which are yet undisclosed, is anticipated to face prime competition from streaming giants like Netflix and Amazon, marking a shift in India's entertainment landscape.