Business
Merger with Reliance would boost company’s profits and reduce risk in India: Disney CEO Bob Iger
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NEW DELHI: Walt Disney CEO Bob Iger recently expressed his belief that a joint venture with Reliance Industries, following the merger of their India businesses, would bring both profit and reduce risk in the Indian market. Speaking at a Morgan Stanley investor conference, Iger stated that aligning with Reliance, a successful company in India, would allow Disney to become part of a larger media entity. This venture would not only benefit the company’s bottom line but also provide a derisking effect in the Indian market.
Last month, Walt Disney Co and Reliance Industries announced binding agreements to merge their media operations in India. The deal would result in the creation of India’s leading media company, incorporating two streaming services and approximately 120 television channels. Reliance and its affiliates would hold a 63.16% stake, while Disney would own 36.84% in the joint venture.
Iger emphasized the importance of remaining in the Indian market, given its large population, despite acknowledging the challenges it presents. The merger would allow Disney to maintain a significant presence in the Indian market while benefiting from a strong partnership with Reliance. This, in turn, would offer the opportunity for business growth and reduce associated risks.
The joint venture is valued at Rs 70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies. Reliance, led by billionaire Mukesh Ambani, has also committed to investing at closing Rs 11,500 crore into the joint venture. This investment aims to strengthen the venture’s competitive position against rivals like Sony and Netflix, with the ambition of becoming the largest OTT subscriber base in India.
Disney’s OTT platform, Disney+ Hotstar, experienced a decline in paid subscribers from around 55 million to 40 million in the first quarter of FY24 due to Reliance’s Jio Cinema securing exclusive rights for live sports. However, the combined entity resulting from the merger will possess the largest OTT subscriber base in India.
Disney+ Hotstar was launched in India in 2020 following the acquisition of 21st Century Fox’s entertainment assets, including Star India and Hotstar, for USD 71.3 billion. The platform offered entertainment and cinema channels such as StarPlus and StarGold, along with sports channels like Star Sports. While Disney+ Hotstar initially expanded its subscriber base through streaming cricket matches, it lost the bid for digital streaming rights in the 2023-2027 cycle to Reliance-backed Viacom18, which secured the rights for USD 720 billion.
Reliance’s media ventures are currently housed in Network 18, which owns TV18 news channels, various entertainment channels under the ‘Colors’ brand, sports channels, and stakes in bookmyshow, as well as magazine publications. Reliance also owns JioStudios, a movie production arm, and majority stakes in Den and Hathway, two listed cable distribution companies.
(With inputs from agencies)
Last month, Walt Disney Co and Reliance Industries announced binding agreements to merge their media operations in India. The deal would result in the creation of India’s leading media company, incorporating two streaming services and approximately 120 television channels. Reliance and its affiliates would hold a 63.16% stake, while Disney would own 36.84% in the joint venture.
Iger emphasized the importance of remaining in the Indian market, given its large population, despite acknowledging the challenges it presents. The merger would allow Disney to maintain a significant presence in the Indian market while benefiting from a strong partnership with Reliance. This, in turn, would offer the opportunity for business growth and reduce associated risks.
The joint venture is valued at Rs 70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies. Reliance, led by billionaire Mukesh Ambani, has also committed to investing at closing Rs 11,500 crore into the joint venture. This investment aims to strengthen the venture’s competitive position against rivals like Sony and Netflix, with the ambition of becoming the largest OTT subscriber base in India.
Disney’s OTT platform, Disney+ Hotstar, experienced a decline in paid subscribers from around 55 million to 40 million in the first quarter of FY24 due to Reliance’s Jio Cinema securing exclusive rights for live sports. However, the combined entity resulting from the merger will possess the largest OTT subscriber base in India.
Disney+ Hotstar was launched in India in 2020 following the acquisition of 21st Century Fox’s entertainment assets, including Star India and Hotstar, for USD 71.3 billion. The platform offered entertainment and cinema channels such as StarPlus and StarGold, along with sports channels like Star Sports. While Disney+ Hotstar initially expanded its subscriber base through streaming cricket matches, it lost the bid for digital streaming rights in the 2023-2027 cycle to Reliance-backed Viacom18, which secured the rights for USD 720 billion.
Reliance’s media ventures are currently housed in Network 18, which owns TV18 news channels, various entertainment channels under the ‘Colors’ brand, sports channels, and stakes in bookmyshow, as well as magazine publications. Reliance also owns JioStudios, a movie production arm, and majority stakes in Den and Hathway, two listed cable distribution companies.
(With inputs from agencies)
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