Walt Disney Co and Reliance Industries Ltd have signed a binding agreement to merge their media businesses in India, people familiar with the matter said, as the U.S. entertainment giant adjusts its plans amid fierce competition in the world’s most populous country. strategy.

Reliance’s media unit and its affiliates, controlled by billionaire Mukesh Ambani, are expected to own at least 61% of the combined entity, with Disney holding the remainder, people familiar with the matter said. They spoke on condition of anonymity because the information is not public.

The latest milestones and other details may be announced early this week, people familiar with the matter said.

A Disney representative declined to comment. A Reliance spokesperson did not immediately respond to a query about the signing of the binding agreement.

The equity split between the partners could change, depending on considerations for Disney’s other local assets when the deal closes, people familiar with the matter said. Reliance shares fell 0.5% during trading in Mumbai, broadly in line with modest losses in the benchmark S&P BSE Sensex.

Disney has a minority stake in broadcast services provider Tata Play and Reliance Group may consider acquiring the company, local news reports said.

Disney has struggled with challenges in India, such as retaining subscribers and securing coveted media assets, while Reliance Group has monopolized a larger share of the local media and entertainment business in recent years. Together they will create a powerful media powerhouse in one of the fastest growing entertainment markets in the world.

Ambani’s unit outbid Disney in 2022 to win streaming rights to the Indian Premier League (IPL) cricket tournament and inked a multi-year deal in April to air Warner Bros. Discovery Channel’s HBO shows, which The show was signed earlier with Disney.

Catch it back

While Disney’s streaming service Disney+ Hotstar managed to attract record audiences at the Cricket World Cup in October and November, it streamed matches for free in the cricket-mad country – a move aimed at winning back subscribers even as This means sacrificing income. Reliance broadcast IPL matches for free in early 2023, attracting huge audiences.

Disney has been considering options for its India business since July, including an outright sale or a joint venture with a partner.

The deal is part of a larger consolidation effort in India’s media and entertainment sector. Sony Group had planned to merge its local unit with Zee Entertainment Enterprises, but disagreements over who would lead the new merged media giant ultimately led to the deal falling apart last month.

© 2024 Bloomberg

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