Following the news that Disney and Reliance Industries would merge their Indian operations, both companies have appointed law firms and started antitrust due diligence, according to Yahoo Finance.
What’s Happening:
- Reliance has appointed Indian law firm Khaitan & Co and Shardul Amarchand Mangaldas, while Disney has roped in AZB & Partners.
- The appointments are the latest sign of progress as Reliance and Disney, which each have a major streaming service as well as 120 television channels between them, look at merging into an entity to create an entertainment superpower in the world's most populous nation.
- Under the terms of the merger, Indian billionaire Mukesh Ambani’s Reliance group would own 51% of the merged entity through a combination of shares and cash, while Disney would hold the remaining 49% of shares.
- The merger deal is expected to be completed by February, even though Reliance is said to be hoping to wrap it up in late January.
- Disney acquired Star India as part of its acquisition of 20th Century Fox in 2019.
- At the time, Star India was considered one of Fox’s crown jewels, and it was an important part of Disney’s plan to build out its streaming business globally.
- The deal gave Disney the broadcast and streaming rights for increasingly popular Indian Premier League cricket matches as well as dozens of TV channels in several languages and a stake in a production company that makes Bollywood movies.
- Following the loss of a bidding war over rights to the aforementioned cricket matches, Hotstar is expected to lose 8 million to 10 million subscribers in its fiscal third quarter.
- At the time, Disney agreed to pay $3 billion to retain the rights to broadcast the IPL on its Star India television network through 2027.