Reliance, Disney Merger Finalized: Rs.70,352 Cr Biggest Media & Entertainment Brand

Nita Ambani to be Chairperson in Reliance, Viacom, and Walt Disney Megamerger.

Reliance Industries, Disney, and Viacom18 announced a merger with each other on Thursday, to become India's largest media and entertainment company, in a deal worth over Rs.70,352 Cr. Reliance Industries and Disney's merger will power the joint venture that will offer an unparalleled library of content across television and digital platforms, with popular channels such as Star, Colors, JioCinema, and Hotstar. Nita Ambani will be acting as the Chairperson and Mr. Uday Shankar as Vice Chairman providing strategic guidance to the JV.

Key Highlights of the Merger

100 plus TV channels and more- The JV runs over 100 TV channels and produces 30,000 plus hours of TV entertainment content annually. It will have an aggregate subscription base of over 50 million through its two OTT platforms, JioCinema and Hotstar, and compete with Amazon, Netflix, and SonyLiv.

The new website JioStar.com is live now- The new website which, as expected, goes by the "forging a new path to inspire a billion imaginations" line tag, is currently the company webpage, not a streaming service, contrary to rumors that had suggested otherwise.

Leadership- Nita Ambani will be the Chairperson and Uday Shankar, will serve as Vice-Chairperson and advise the boards through strategic oversight.

Major Stake Holdings- Reliance Industries holds a 16.34% stake, a 46.82% stake by Viacom 18, and remaining with Disney 36.84% stake in the joint venture.

Alignment Strategy- Reliance now holds ownership of 13.01% in Paramount Global, thereby cementing its hold further on the global entertainment bucket.

Three-CEO model: It has also adopted the three-CEO model whereby the three leaders will run the company. Kevin Vaz, Kiran Mani, and Sanjog Gupta will head the three businesses. Kevin Vaz will lead the combined entertainment business across platforms, Kiran Mani will be at the helm of the combined digital business while Sanjog Gupta will be at the helm of the combined sports business.

Companies Involved in the Merger.

1. Reliance Industries Limited-

Reliance is India's largest private sector company having consolidated revenue of Rs.10,00,122 crore, cash profit of Rs.1,41,969 crore, and net profit of Rs.79,020 crore in the year ended March 31, 2024. Reliance operates in the following businesses: hydrocarbon exploration and production, refining and marketing of petroleum products, petrochemicals, advanced materials, and composites; renewables, including a leading contribution from the Jio renewable energy business in solar and hydrogen; and retail through JioMart and digital services providing platforms for payments, finance, education, and more.

2. Walt Disney  

The Walt Disney Company, along with its subsidiaries, is an internationally diversified family entertainment and media enterprise operating three business segments Entertainment, Sports, and Experiences. Disney is a Dow 30 company and brought in annual revenue of $88.9 billion in Fiscal Year 2023.

3. Bodhi Tree Systems

Bodhi Tree Systems is a strategic consumer technology investor focused on Southeast Asia opportunities and, in particular, India. It is the platform for Lupa Systems owner James Murdoch and Uday Shankar, which was launched early this year to explore and invest across Southeast Asia as well as the Middle East. Apart from media and education, Bodhi Tree is looking forward to a significant investment in the healthcare consumer technology sectors that no doubt present great opportunities but are marred by undercapitalization and lack of innovation. A sovereign wealth fund from the State of Qatar, Qatar Investment Authority (QIA), has an investment interest in Bodhi Tree Systems.

Story So Far

On 27 August 2024, the Competition Commission of India (CCI) agreed to the merger subject to compliance with certain voluntary modifications offered by the parties. In addition, the CCI with other anti-trust authorities in the EU, China, Turkey South Korea, and Ukraine has also sanctioned the deal.

The two completed their merger after they won a key approval from India's antitrust regulator last month. This follows some assault on their grip on broadcasting rights for cricket, India's favorite sport in which both are partners.

Disney Hotstar's CEO Sajith Sivanandan resigned from the role as business integration gathered pace for the merger. (Reuters notes added).

What’s likely in the Future?

• The former Google executive Kiran Mani, who heads JioCinema, would command the digital organization.

• Kevin Vaz would lead the entertainment business.

• Sanjog Gupta, who leads sports at Disney's Indian media business, would take up an equivalent role in the sports business of the merged brand.

• There have also been numerous reports that JioCinema and Disney+ Hotstar would be merged under one streaming app named JioHotstar, but this does not have clarity yet. The release simply states, "The combination of 'Star' and 'Colours' on the television side and 'JioCinema' and 'Hotstar' on the digital front will provide extensive choice of content across entertainment and sports to viewers in India and globally."

Mukesh Ambani’s Remarks

The Chairman of Reliance Industries on this merger said “With the formation of this JV, the Indian media and entertainment industry is entering a transformational era. Our deep creative expertise and relationship with Disney, along with our unmatched understanding of the Indian consumer will ensure unparalleled content choices at affordable prices for Indian viewers. I am very excited about the JV's future and wish it all the success”.

Conclusion

The merger of Reliance, Disney, and Viacom18 will change the media face of India.

Reliance, Disney, and Viacom18's three-way merger amounting to Rs.70,352 Cr would pave a new chapter in the Indian media and entertainment arena, to be the biggest in the country. The joint venture has been reported to be overseen by Nita Ambani, and run through the model of the three-CEO to provide all-inclusive content on televisions and digital media. The collaboration will be capable enough to restructure Indian entertainment by providing varied content to millions through channels that include JioCinema, and Hotstar, among others.

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