Overview
Reliance Industries, led by Mukesh Ambani, is reportedly in the conclusive stages of securing a multi-billion dollar deal with Walt Disney Co. to obtain Disney’s operations in India.
The Deal
According to Bloomberg sources, the deal is anticipated to be an all-encompassing agreement valued at around $10 billion instead of a partial sale. Reportedly, Disney is contemplating selling a controlling stake in its business to Reliance. Reliance’s streaming platform’s success has reportedly impacted Disney’s operations in India, initiating this conceivable move.
After the deal’s completion, Reliance is anticipated to become the majority stakeholder in the Disney Star business, valued at roughly $10 billion. The American entertainment giant Disney will keep a minority stake in the business.
Disney’s Challenges
Disney’s streaming services, particularly Disney+, have faced financial challenges and setbacks, with a loss of 4 million subscribers in the first quarter and an anticipated total loss of $800 million in the third quarter, as reported by Bloomberg, with losing streaming rights for significant cricket tournaments, including the Indian Premier League and the national cricket team’s bilateral matches, to RIL’s broadcasting unit.
In the previous fiscal year ending in March 2022, Disney’s India business, enclosing the Disney+Hotstar streaming service and Star India, was rated as its most significant globally in terms of users. Yet, it registered a loss of $41.5 million on revenue of $390 million during that period.
In response to these challenges, Bob Iger, former CEO of Disney, is considering a comprehensive restructuring or sale of Disney’s TV and streaming business in India, where Disney+ has experienced significant losses. However, there are plans to retain Hulu, a streaming service, and Disney is likely to buy Comcast’s 33% stake in Hulu by 2024.
Reliance’s Triumph
Before reaching an understanding with Reliance, Disney had been busily exploring diverse choices for its India assets, including discussions about partnerships or partial sales involving notable figures such as Gautam Adani, Kalanithi Maran, and the private equity firm Blackstone.
Notably, Mukesh Ambani, Chairman of Reliance Industries, made substantial moves in the media and entertainment industry last year by obtaining IPL rights for a staggering $2.7 billion. Notably, he broadcasted the cricket matches for free earlier this year. Ambani secured the rights for Warner Bros Discovery Inc.’s HBO shows in India in another momentous triumph. This marked a substantial win as the content was previously under Disney’s umbrella. These moves undoubtedly changed the dynamics of the entertainment industry.
The official announcement of this substantial acquisition is expected to be made by the companies in November. According to sources, there’s a probable factor of incorporating some of Reliance’s media units with Disney Star as part of the deal, as reported by Bloomberg.
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