Manoj Modi, a key adviser to Mukesh Ambani, is leading negotiations for RIL, supported by the conglomerate’s M&A team.
Mukesh Ambani heads RIL and Disney is about to launch India’s largest media and entertainment company
Mumbai-based Reliance Industries Ltd (RIL) and Walt Disney Co. are in the final stages of formalizing a non-binding term sheet to advance their plans to merge their media and entertainment operations in India, the Economic Times quoted the matter as saying trusted sources. If successful, the deal is expected to give the Mukesh Ambani-led conglomerate a controlling stake in what will become the country’s largest media and entertainment company.
The current proposal envisages setting up a subsidiary entity under RIL’s Viacom18, which will assimilate Star India through a stock exchange. RIL is seeking a majority stake of at least 51 percent in the merged company, with Disney retaining the remaining 49 percent. The size of both companies is comparable, indicating that RIL is likely to make a cash payment for the majority stake, ET reported.
Negotiations are currently underway to develop a business plan for an immediate cash injection, expected to be between $1 billion and $1.5 billion. The final ownership structure and valuation of the company will be determined based on the financial contributions of each party.
As ET reported, the board is expected to have equal representation of at least two directors each from Reliance and Disney. Bodhi Tree, led by Uday Shankar and the second largest shareholder in Viacom18 after Reliance, is expected to secure a seat. The sources said adding at least two independent directors is being considered and changes could be made in the coming weeks.
Manoj Modi, a key adviser to Mukesh Ambani, is leading negotiations for RIL, supported by the conglomerate’s M&A team.
In addition to the merger, the US company is expected to grant the joint venture a five-year license for exclusive subscription video on demand (SVOD) content, which includes Disney+ originals and their library content. A five-year lock-in agreement is also expected, except in the event of an IPO of the combined company. The joint venture is expected to gain access to distribution channels and Jio platforms on mutually agreed terms, with a delineation of prohibited transactions with competitors.
