JioCinema & Disney+ Hotstar to merge operations by February

Reliance Industries and Walt Disney have reportedly signed a non-binding agreement to merge their Indian media operations. The deal is likely to be completed by February with the Mukesh Ambani-led conglomerate aiming to finish the process by the end of January. Under the merger, Reliance will own 51% through a combination of shares and cash and Disney will hold the remaining 49%. 

This consolidation will create one of the country’s largest media empires, putting it in contention with players such as Zee Entertainment and Sony and streaming services like Netflix and Amazon Prime.

Former Disney executive brought back in July by CEO Bob Iger as an advisor, Kevin Mayer and Mukesh Ambani's key advisor, Manoj Modi led the negotiation and both of them had been working for months to successfully close the negotiation.

The news source reported that a valuation exercise will officially begin, and legal advisors will start working on the finer details after last week's signing. There is the possibility of a 45-60-day exclusivity period that can be mutually extended.

As per the sources, the deal may create a unit under Reliance's Viacom18 to take control of Star India through a stock swap. It is likely that Reliance may pay cash for the majority stake. Jio Cinema will also be included in the deal.

Both the firms are expected to invest which may range between $1-1.5 billion.

The report said that the new board is expected to have at least two directors each from Reliance and Disney. Uday Shankar-led Bodhi Tree, the second largest shareholder in Viacom18 after Reliance with a 15.97 per cent stake, is a contender for a seat on the board. The companies are considering a minimum of two independent directors. This could change in the weeks ahead.