Reliance Industries Ltd, led by Mukesh Ambani, is close to acquiring Walt Disney Co.’s India operations, a move that could significantly alter the Indian entertainment industry, as Disney is considering selling a controlling stake in its Disney Star business.
Currently, Disney values its India business, which includes the popular Disney+ Hotstar streaming service and Star India, at a whopping $10 billion. Interestingly, this segment was Disney’s largest globally by users just last year.
However, it wasn’t all rosy; the business reported a loss of $415 million against a revenue of $390 million for the year ending March 2022. On the other hand, Reliance’s valuation of the same assets stands between $7 billion and $8 billion. This discrepancy in valuation raises intriguing questions about the factors each company is considering in their assessments.
Sources suggest that the acquisition announcement could come as early as next month. Furthermore, there’s buzz about some of Reliance’s media units potentially merging into Disney Star. However, Disney might still retain a minority stake in its Indian business, ensuring it doesn’t lose its foothold entirely in a market that has been significant for them.
So, why is Disney considering this move?
Over the past year, the company has been actively exploring options to either sell or find a partner for its India assets. They’ve even held discussions with several potential buyers, indicating a strategic shift in their India operations.
A key player in this narrative is Reliance’s streaming platform, JioCinema. It has emerged as a formidable competitor to Disney India. The game-changer was JioCinema acquiring the digital rights to the Indian Premier League cricket tournament, a massive draw for Indian audiences, which was previously with Disney. This move by Reliance has undoubtedly put pressure on Disney’s streaming operations in the country.
