Billionaire Mukesh Ambani’s Reliance Industries (RELI.NS) and Walt Disney (DIS.N) have taken significant steps towards their proposed merger in the Indian media and entertainment sector. According to sources familiar with the matter, both companies have engaged law firms and initiated antitrust due diligence for the potential merger.
Reliance has enlisted the services of Indian law firms Khaitan & Co and Shardul Amarchand Mangaldas, while Disney has engaged AZB & Partners for the merger process. The move signifies advancing developments in the collaboration between the two companies, both of which boast significant streaming services and a combined total of 120 television channels.
During a meeting in London in late December, senior Disney executives from Burbank headquarters and high-ranking Reliance officials from Mumbai formalized their commitment to the deal by signing a non-binding term sheet. If the merger proceeds, it is expected that Ambani’s group will hold a majority stake in the unified entity.
However, the potential merger is anticipated to face formidable antitrust challenges and intense scrutiny, possibly requiring divestment of assets, particularly TV channels, to address concerns about market dominance. Sources familiar with the due diligence process have revealed that initial work for the antitrust review is already underway.
If the agreement is reached, it would mark a significant transformation in India’s television and streaming landscape, following Sony’s intention to merge its Indian operations with Zee Entertainment. Disney’s operations in India have faced challenges, particularly in its competition with Reliance, which offers free streaming of the Indian Premier League (IPL) cricket tournament. Disney had previously held the digital rights for IPL in India.
Antitrust experts anticipate that the streaming sector and its influence over cricket-related advertising will be pivotal aspects of the potential merger. Disney’s Hotstar app currently holds the rights for International Cricket Council matches in India until 2027, while Reliance’s JioCinema app has the rights for IPL.
In preliminary discussions, executives from both companies have reportedly disagreed on the valuation, with debates over whether Disney or Reliance’s entertainment unit holds the higher value.
