In one of the biggest media merger deals globally this year, the Indian conglomerate Reliance Industries Limited (RIL) and American entertainment behemoth The Walt Disney Company have signed binding agreements to combine their respective Indian media assets into a gargantuan new joint venture entity valued at $8.5 billion.

The merged company, to be called Star India Private Limited (SIPL), brings together two of India’s most prominent media names. It combines RIL’s Viacom18 Media business with Disney’s Star India operations, including Fox Star Studios.

The new venture will control the largest portfolio of TV channels and streaming platforms in India with unrivaled reach across entertainment, films, and sports programming. Such a deal likely would not have been approved in countries with more strict antitrust regulators.

RIL Chairman and Managing Director, Mukesh Ambani, who is also India’s richest man, hailed the deal to merge Viacom18 into Star India as a “landmark agreement that heralds a new era in the Indian entertainment industry.”

Meanwhile, Disney’s legendary CEO Bob Iger stressed that the deal opens up new opportunities to better serve Indian consumers amid rapid growth in streaming and digital services.

“Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”, the CEO commented in the official press release that announced the deal.

Ownership Structure Gives Ambani-Owned Entities a Majority Stake

As per the definitive agreements, Reliance will hold a controlling 63% stake in the combined SIPL joint venture. This comprises direct ownership of 16.3% of SIPL shares by RIL subsidiaries, along with a 47% interest through Viacom18. The Ambani family’s telecom-to-retail conglomerate is also investing Rs 11,500 crore (nearly $1.5 billion) into SIPL to fund future expansion plans.

Disney will own the remaining 37% share of the JV. According to the company’s financial disclosures, Disney could write down the value of its India investments by as much as $2.4 billion as a result of the merger.

RIL chairman Mukesh Ambani’s wife Nita Ambani will serve as Chairperson of the new SIPL company. Disney India’s former head Uday Shankar, currently on the board of Reliance’s Viacom18, has been named Vice-Chairman and will hold a strategic role guiding SIPL’s leadership.

Disney will secure three seats on the Board of Directors of SIPL while Reliance will have five. Two independent directors will also serve the entity to balance out its corporate governance structure. Ambani’s wife, Rita Ambani, will serve as Chairman of SIPL.

SIPL Will Have Unmatched Scale Serving Nearly 800 Million Indians

The merger creates an unparalleled media powerhouse in India. SIPL will have over 750 million weekly viewers and digital subscribers combined, catering to over 40% of Indian TV and online audiences.

The JV consolidates market-leading assets from both sides. This includes Reliance’s Viacom18 portfolio spanning popular entertainment channels such as Nickelodeon, Comedy Central, MTV, and the streaming service JioCinema.

From Disney (DIS), the deal brings in the Star India network with over 80 TV channels as well as India’s leading streaming platform Hotstar.

Moreover, the combination yields an enviable range of sports properties, including immensely valuable cricket rights to the Indian Premier League (IPL) which is enormously popular. Global marquee properties from Disney such as the English Premier League, Wimbledon, and Formula One racing further bolster SIPL’s content slate.

Breadth of Content Library to Include Thousands of Hours of Top-Notch Content

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The breadth of content available to SIPL across films, TV shows, and live sports is unrivaled in India. It brings together over 30,000 hours of original and licensed content along with Disney’s beloved and widely-watched family programming catalog.

As part of its commercial agreements, Disney will provide the JV access to its vast library of globally renowned entertainment brands. This encompasses Disney, Marvel, Star Wars, and National Geographic along with content assets from the Fox acquisition.

Reliance chairman Ambani emphasized how this “pool” of creative talent and intellectual property will accelerate the growth of India’s media and entertainment industry. Disney CEO Bob Iger similarly highlighted the “broad portfolio of digital services and entertainment and sports content” that will be made available to consumers within the country as a result of the merger.

What Does the Deal Mean for The Future of Streaming in Asia?

Industry experts concur that SIPL is primed to drive the ongoing boom in digital streaming across India. The combined might of market leaders Hotstar and JioCinema recreates a formidable force in Indian OTT video services.

In August last year, JioCinema, owned by Reliance, absorbed Voot, another market-leading Hindu streaming brand owned by Viacom18.

Disney has been struggling to sustain Hotstar’s growth momentum after losing broadcast rights to major cricket properties. However, Viacom18’s recent big-ticket investments to acquire the IPL digital rights should instantly plug that gap.

According to data from Media Partners, India’s online video market will reach a value of $17 billion by 2028. Through this JV, Reliance and Disney have the capabilities to capture a major slice of that total addressable market.

“Strategic and private equity investments in the online video sector in China, India, Indonesia, Japan, Korea, and Southeast Asia are enhancing local and regional companies’ competitiveness. The online video sector is rationalizing with price increases, disciplined content, and marketing investment, ad tiers, new monetization strategies, and local market consolidation in Korea, Japan, and India”, the report reads.

Rumors of the deal between Disney and Reliance started to circulate back in October last year. The two companies competed in an intense rivalry throughout 1multiple segments including sports, TV, and streaming but appear to have come to terms to take advantage of the massive size of their media assets.

Regulatory Scrutiny Ahead?

The sheer scale of the proposed SIPL merger is likely to attract at least some scrutiny from India’s competition regulator though it’s unclear whether it will step in and block the venture. The Competition Commission of India (CCI) will assess if the combined entity challenges market competitiveness illegally.

As leading players in broadcasting and streaming, the union of Star India and Viacom18 does raise concentration concerns. However, analysts expect CCI approval to go through since the deal entails combining existing assets rather than acquiring a major rival (though the result is rather similar). A mitigating factor is that Sony and Zee called off their proposed mega-merger in January, which would have resulted in a more noticeable competitive imbalance.

Nonetheless, intensive scrutiny is inevitable given the landmark nature of this Reliance-Disney transaction. Securing other customary approvals will take at least 8-12 months. As per Disney’s official communications, the deal is expected to go through by the first quarter of 2025. Only then can the full might of the SIPL joint venture be unleashed across India’s rapidly evolving media landscape.

For Reliance, the prize of this Disney deal is control over what is being considered a content powerhouse for the 21st century. Disney gains access to the performance of a profitable India streaming business, renewed sports rights, and a partner deeply embedded in understanding local consumer demand.