India approves $8.5bn Reliance-Disney entertainment mega-merger
India’s competition watchdog has provisionally approved an $8.5 billion (£6.43 billion) merger between Disney and Reliance Industries.
In this venture, Reliance Industries, led by billionaire Mukesh Ambani, will hold a majority stake, creating India’s largest entertainment entity poised to compete with Sony, Netflix, and Amazon.
The joint venture will secure broadcasting rights for most of India’s major sports events, including highly sought-after cricket tournaments.
The merger is anticipated to be finalized within the next six months and will be overseen by Nita Ambani, Mr. Ambani’s wife, as chairperson.
The deal is “subject to the compliance of voluntary modifications,” as stated in a press release from India’s competition watchdog on Wednesday.
Concerns had previously been raised about the merger’s potential control over cricket broadcasting rights, given the sport’s enormous popularity and fan base in India.
For years, Disney and Reliance have attracted Indian subscribers through their streaming services by offering free livestreams of cricket matches.
Reuters reports that 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 (ICC) matches.
The competition watchdog had expressed concerns that the new entity might drive up advertising prices for cricket matches. However, the two companies have reportedly committed not to excessively increase advertising rates for cricket match streams.
To balance revenue, they also plan to sell seven to eight of their non-sports TV channels, according to a source cited by Reuters.
Following the merger, the companies will hold Indian broadcasting rights for events such as Wimbledon, MotoGP, and the English Premier League (EPL).
The deal “creates a huge digital entertainment giant”, Gurmeet Chadha, managing partner of financial consultant Complete Circle, told CNBC-TV18 news channel.
“They have the content muscle and their tech capabilities are well-known. They have the reach in terms of distribution. They have the relative analytics and insight into what content is consumed where,” he said.
In a country with 1.4bn people and 90% internet penetration, “this has huge, huge long-term implications,” he added.