India Approves $8.5 Billion Mega-Merger Between Reliance and Disney
India’s competition watchdog has provisionally approved an $8.5 billion (£6.43 billion) merger between Disney and Reliance Industries. This deal, which will see billionaire Mukesh Ambani’s Reliance Industries holding a majority stake, will create the largest entertainment entity in India, positioning it to rival competitors such as Sony, Netflix, and Amazon.
The joint venture will secure broadcasting rights for a significant portion of India’s sports events, including high-profile cricket tournaments. The merger is expected to be finalized within the next six months and will be chaired by Nita Ambani, according to reports.
The approval is contingent upon the companies complying with certain voluntary modifications, as noted by the competition watchdog in a press release on Wednesday. The regulator had previously expressed concerns about the merger’s potential impact on broadcasting rights for cricket, India’s most popular sport, which has a vast fan base.
Disney and Reliance’s streaming services have long attracted Indian subscribers with free live streams of cricket matches. The two companies have invested $9.5 billion in TV and streaming rights for the Indian Premier League (IPL), T20 World Cups, and International Cricket Council matches. The watchdog had feared that the merger could lead to higher advertising costs for these cricket streams.
In response, the companies have committed not to excessively increase advertising rates for cricket matches and have also pledged to sell seven to eight non-sports TV channels to balance revenue, as reported by Reuters.
The merger will also grant the combined entity Indian broadcast rights for events like Wimbledon, MotoGP, and the English Premier League (EPL).
According to Gurmeet Chadha, managing partner at Complete Circle, the merger will create a substantial digital entertainment powerhouse. He told CNBC-TV18, “They have the content muscle and well-known tech capabilities. Their distribution reach is extensive, and they possess valuable insights into content consumption patterns.” With a population of 1.4 billion and 90% internet penetration, Chadha emphasized that the merger has significant long-term implications.