Reliance and Disney’s Game-Changing Merger

Reliance Industries, the country’s most valuable company, and Walt Disney have signed a non-binding agreement to combine their media businesses, the Economic Times reported, citing unnamed sources.

According to the newspaper, the merger would give Reliance a 51 percent stake in equity and cash, Disney the remaining 49 percent, and control of billionaire Mukesh Ambani’s Reliance Group.

Mukesh Ambani-led Reliance and Disney signed a non-binding merger agreement
The 51:49 cash-and-stock merger is expected to be completed by February
The combined company will own 51 percent and Disney will own 49 percent.
Mukesh Ambani’s Reliance Industries signed a non-binding deal with Walt Disney Co. in London last week, reportedly creating the country’s largest media and entertainment business. The 51:49 stock-for-cash merger is expected to be completed by February, while Reliance hopes to complete the merger by early January.

The Economic Times reported that Kevin Mayer, a former chief executive and current adviser to Disney, and Manoj Modi, a close ally of Mr. Ambani who has been negotiating a term sheet for months, attended the meeting.

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According to this report, the valuation work by an independent valuer is expected to start officially soon. The report added that the plan is to set up a Viacom 18 subsidiary of RIL, which will acquire Star India through a share swap.

Reliance is expected to be the largest shareholder with at least 51 percent ownership, while Disney will own 49 percent of the company. JioCinema will also be a part of this deal. RIL is likely to pay cash for the controlling stake, the report said.

The board is expected to have equal representation from Reliance and Disney. Uday Shankar-led Bodhi Tree, Viacom18’s second largest shareholder after Reliance, is likely to win the seat. In addition, having at least two independent directors is considered.

Disney’s India operations lost the online rights to IPL matches from 2023 to 2027, although it won the telecast rights. The online streaming rights have been transferred to JioCinema.

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