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We will merge media assets in India, say Reliance and Disney

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MUMBAI, India: India’s largest conglomerate Reliance Industries and US entertainment giant Walt Disney have announced a merger of their Indian television and streaming media assets, creating an $8.5 billion entertainment company.

In a joint statement, the companies said Reliance would provide $1.4 billion to the combined entity and hold more than 63% stake, while Disney would hold the rest.

Mukesh Ambani, Asia’s richest man, heads Reliance.

In another example of how foreign companies can struggle to expand in India, Disney has failed to stop the exodus of users from its streaming business in India and has suffered from financial pressures caused by billion dollars in Indian cricket rights payments.

The merger values ​​the US entertainment giant’s Indian operations at around $3 billion, much lower than the $15 billion valuation when Disney acquired it as part of its deal with Fox in 2019.

The entity resulting from the Reliance-Disney merger will have 120 television channels. two streaming platforms, as well as cricket television and streaming rights for major tournaments in a cricket-mad country.

Jinesh Joshi, analyst at Prabhudas Lilladher in India, said: “The combined entity will create a sports giant in India. »

“This merger will give Reliance a lot of bargaining power when it comes to negotiating advertising contracts. For Disney, partnering with a bigger player, in terms of its financial pockets, will give it a cash cushion,” he added.

The two companies said the transaction values ​​the combined business at approximately $8.5 billion on a post-financing basis, will attract more than 750 million viewers across India and will cater also to the Indian diaspora around the world.

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