Disney CEO Bob Iger
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Disney will formally merge its Indian operations with Reliance Industries, creating a joint venture that will combine Reliance's Viacom18 and Disney's Star India.
Disney has been exploring options for its India operations for several months, and a deal with Reliance had been rumored for some time. On Wednesday, the two companies officially announced it.
Under the terms of the agreement, Reliance will invest $1.4 billion in the joint venture, valuing it at $8.5 billion. Disney will provide content licenses to the joint venture and “may also provide certain additional media assets to the joint venture, subject to regulatory and third-party approvals,” the company said. The joint venture will also have exclusive rights to distribute Disney films and productions in India.
Mr. Nita M. Ambani will be the Chairman of the JV and Mr. Uday Shankar will provide strategic guidance to the JV as Vice Chairman.
Disney has been trying to figure out how best to approach India, the world's most populous country. The company bought a stake in Star India from 21st Century Fox, giving it a big footprint in the country, but the decision not to renew cricket streaming rights affected the company's ability to add streaming subscriptions to the market. .
In an SEC filing related to the merger, Disney said it would incur a “non-cash pre-tax impairment charge estimated to be between $1.8 billion and $2.4 billion,” which also reflects a write-down of Star India's net assets. Stated. As a write-down of goodwill in the Entertainment Linear Network reporting division.
“India is the most populous market in the world, and we are excited that this joint venture provides the opportunity to create long-term value for the company,” Disney CEO Bob Iger said in a statement. ” “Reliance has a deep understanding of the Indian market and consumers, and together we are building one of the country's leading media companies to provide consumers with a broad portfolio of digital services, entertainment and sports content. We will be able to provide better service.”
“We are honored to strengthen our relationship with Reliance and to also have Disney, a global leader in media and entertainment, on board,” added Shankar, co-founder of Bodhi Tree Systems. Ta. “We are all committed to delivering superior value to our viewers, advertisers and partners. This joint venture will shape the future of entertainment in India and make Digital India a global example. We are ready to accelerate the Prime Minister's vision.”
Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries, added, “This is a landmark agreement that heralds a new era for the Indian entertainment industry.” “We have always respected Disney as the world's premier media group and are very excited to form this strategic joint venture, which brings together our extensive resources, creative capabilities and market insight. We welcome Disney as a key partner to the Reliance Group. ”
