India (Commonwealth) _ Rather than selling the firm in pieces, Disney is nearing a deal to sell its India assets to Reliance Industries, its greatest rival in the nation, for roughly $10 billion.
The US entertainment conglomerate may sell a full stake in the Disney Star company, which it values at roughly $10 billion, rather than the piecemeal trades considered previously, according to people who asked not to be identified because the conversations are confidential. Reliance values the assets at $7 billion to $8 billion, according to some estimates.
According to the sources, the acquisition might be announced as soon as next month, with some of Reliance’s media operations merged into Disney Star. As per people familiar with the concept, if any cash and stock swap transaction is completed, Disney will likely keep a minority stake in the Indian company. There has been no final decision on the transaction or valuation, and Disney may decide to keep the assets for a while longer, according to the report.
According to different media sources, Disney has been exploring possibilities to sell or find a partner for its India holdings, and has held negotiations with billionaires Gautam Adani and Sun TV Network-owner Kalanithi Maran, as well as private equity company Blackstone.
Disney may now sell a controlling stake in the company to Reliance, the Mukesh Ambani-controlled conglomerate whose streaming platform’s popularity has weighed on the US company’s Indian operations.
According to the article, Reliance, whose broadcast partnership Viacom18 operates JioCinema, values Disney’s India assets, which include the Disney+ Hotstar streaming service and Star India, at $7 billion to $8 billion. When Disney acquired Fox’s business, the enterprise value of the India business, which was Disney’s largest by users last year, was estimated to be around $15 billion to 16 billion.
According to Bloomberg, the purchase may be disclosed as early as next month, however no final decision has been made and Disney might yet elect to keep the assets. media’s inquiries for comment were not immediately responded to by Disney or Reliance.
JioCinema has intensified the pressure on Disney India and other streaming sites, with Ambani marketing the platform by providing free access to the Indian Premier League cricket event, the digital rights to which were formerly held by Disney.
If Reliance delivers Disney content for free, the OTT industry’s growth pace will be slower since subscription video-on-demand revenue will not be generated, according to Karan Taurani, senior vice president and research analyst at Elara Securities.
The “significant” overlap between Reliance-owned TV18 Broadcast and Disney in the urban genre may cause regulatory pushback, and some stations may need to be shut down for clearance, according to Taurani.
The talks are an example of Ambani’s disruption of India’s entertainment industry, which began when he paid $2.7 billion for the streaming rights to the Indian Premier League in 2022. Earlier this year in India, the billionaire’s JioCinema platform decided to show the very popular local cricket league for free.
Reliance then signed a multi-year agreement to broadcast HBO shows in India, material that was previously with Disney.
Despite dwindling subscription numbers, Disney Star has not given up on the market and has continued to invest. Bloomberg News reports that the company has been investigating other possibilities for the business, such as an outright sale or the formation of a joint venture.
Nonetheless, according to a company statement, Disney’s India streaming platform garnered a record 43 million viewers on Sunday for the men’s Cricket World Cup 2023 match between India and New Zealand. This number was higher than the 35 million who attended the highly anticipated India-Pakistan encounter earlier this month.
However, neither Disney nor Reliance has responded on the report and probably spokespersons from both frontline businesses will reveal the proposed business by next month.
