Disney has signed a non-binding term sheet with Reliance Industries that will see the two companies merge their Indian operations, according to Deadline.
What’s Happening:
- The completion of this merger would create one of India’s biggest entertainment empires.
- Under the terms, 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.
- Following months of dealings, the term sheet was finalized at a meeting last week in London that saw Bob Iger advisor Kevin Mayer representing Disney and Ambani advisor Manoj Modi there for Reliance.
- 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.