Walt Disney Co. and Reliance Industries Ltd., led by Asia’s richest tycoon Mukesh Ambani, are expected to sign a non-binding pact as early as Monday to merge their media operations in India in a cash-and-stock deal, according to people familiar with the matter.
Ambani’s retail-to-refining conglomerate will infuse money to hold at least 51% of the merged entity if the deal goes through, the people said, asking not to be named as the information is not public. Disney will hold the rest, they added, in what will be one of the largest media behemoths in India.
The diligence and valuation exercises would start after the exclusivity agreement is signed next week and that will determine how much money Reliance will invest in the business, the people said.
A Disney spokesperson declined to comment, while Reliance didn’t respond to requests for comment.
No final decision has been made on the deal and its terms, and either party can still call off the transaction, they added. The Economic Times newspaper reported the proposed merger plan earlier on Tuesday.
The multi-billion-dollar transaction, as Bloomberg reported in October, is illustrative of Ambani’s deep ambitions in the media and entertainment sector of the world’s most-populous country that’s already lured global giants like Netflix Inc. and Amazon Prime.
Reliance scooped up the streaming rights to the Indian Premier League for $2.7 billion in 2022 and bagged a multi-year pact in April to broadcast Warner Bros Discovery Inc.’s HBO shows in India.
For Disney, it’s a way to limit exposure in a fiercely competitive market where its subscriber numbers are sliding, while still keeping a foothold in India.
“We have an opportunity to strengthen our hand,” Bob Iger, Disney’s chief executive officer, said in a Nov.8 earnings call with that analysts, adding that the company was considering its options in India. “We also are looking to see whether we can strengthen our hand, obviously, improve the bottom line.”