$8.5bn Disney-Reliance merger approved! What it means for India’s media landscape

The Indian tribunal has approved an $8.5 billion merger between Reliance Industries Limited and Walt Disney Co.‘s Indian media assets, setting the stage for a seismic shift in India’s entertainment industry. The merger, announced in February 2024, brings together Reliance, Viacom18 Media Private Limited, and Disney to form a joint venture, creating an unprecedented media powerhouse by merging Viacom18’s operations with Star India Private Limited. The merged entity will control popular platforms such as Colors, StarPlus, Star Sports, JioCinema, and Hotstar, along with exclusive rights to Disney’s productions in India.

The deal, valued at ₹70,352 crore, includes a significant ₹11,500 crore investment from Reliance, strengthening its influence in the Indian media landscape. This merger aims to challenge competitors like Sony, Netflix, and Amazon by leveraging a vast content library and digital distribution channels. However, the transaction raised concerns over potential monopolistic control, particularly regarding cricket broadcasting rights. In response to these concerns, the Competition Commission of India (CCI) approved the merger with conditions, requiring Reliance and Disney to maintain fair advertising practices and avoid unreasonable rate hikes for streamed cricket content.

A game-changer in Indian media

The new entity, predominantly owned by Reliance, is set to redefine digital entertainment in India. Mrs. Nita M. Ambani, appointed as Chairperson, and Mr. Uday Shankar, serving as Vice Chairperson, are expected to provide strategic direction to the venture, aiming to serve over 750 million viewers in India and the diaspora. This joint venture will not only consolidate television and streaming operations but also secure exclusive rights to distribute Disney’s vast library of over 30,000 assets, including its films and productions.

Strategically positioned to lead the digital transformation in India’s media sector, the joint venture combines the strengths of Viacom18, Star India, and Disney to offer a diverse range of iconic content across multiple platforms. The collaboration is anticipated to revolutionize the industry by delivering high-quality, affordable digital entertainment and challenging established and emerging players alike.

Expert insights on market impact

Media analysts believe this merger could significantly impact the competitive dynamics of the Indian media and entertainment industry. According to industry expert Rahul Mehra, “This joint venture sets a new benchmark in media consolidation. It not only creates a formidable entity but also compels competitors to rethink their strategies in content production, distribution, and audience engagement.” The partnership is expected to bring forth a wave of innovation and competitive pricing, benefiting consumers in the long run.

Regulatory scrutiny and future outlook

The merger, which underwent rigorous scrutiny by the CCI, is subject to multiple regulatory, shareholder, and customary approvals. The involvement of top financial and legal advisors like Goldman Sachs, Skadden, and Cleary Gottlieb reflects the deal’s complexity and importance. Expected to close between late 2024 and early 2025, the joint venture is poised to reshape the future of entertainment in India. By combining their media expertise and extensive content libraries, Reliance, Viacom18, and Disney aim to deliver an unparalleled digital entertainment experience, offering viewers access to a vast array of popular shows, sports events, and exclusive films.