Disney to merge Indian media business with Reliance

By:
on Feb 28, 2024
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  • Walt Disney Co and Reliance to merge media assets in India.
  • Reliance will invest $1.4 billion to secure a 63% stake in joint entity.
  • Disney stock is currently up about 35% versus its 52-week low.

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Walt Disney Co (NYSE: DIS) is in focus today after announcing plans of merging its Indian media business with Reliance Industries.

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Details of Disney-Reliance agreement

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The merger puts together Star India and Viacom18 to create an entertainment giant valued at about $8.5 billion.

Reliance will invest $1.4 billion in the combined entity and, along with affiliates, will have a more than 63% stake in it. The two companies said in a joint statement today:

The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment.

Earlier in February, the Walt Disney Co raised its dividend after reporting a decline in its quarterly DTC loss as Invezz reported here. $DIS is currently up about 35% versus its 52-week low.

Disney to record an impairment charge in Q2

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Mukesh Ambani’s (owner of Reliance Industries) wife – Nita Ambani will serve as chairman of the board at the joint company while Uday Shankar (former Disney executive) will be its vice chair.

The combined company will have two streaming platforms and 120 TV channels which make it a force to reckon with for rivals including Netflix, Sony, and Zee Entertainment.

On Wednesday, Disney also said it will record between $1.8 billion and $2.4 billion worth of pre-tax impairment charge (non-cash) in its current quarter. About half of it would be related to the Star India deal, the multinational added.

Wall Street currently has a consensus “overweight” rating on $DIS.

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