Reliance Industries and The Walt Disney Company have reportedly concluded a binding agreement to merge Viacom18 and Star India, forming India's largest media conglomerate covering TV broadcasting, streaming, movies, and sports, according to The Economic Times. The anticipated announcement of the deal this week comes after over four months of negotiations.

The combined revenue of the two companies in FY23 amounted to Rs 25,000 crore. In the merger, Reliance is expected to hold 61%, Disney 33%, and Bodhi Tree Systems the remaining 6%. Despite being the larger entity, Disney's Star India valuation has declined to around $4 billion, partly due to expected losses in its sports business.

Viacom18, valued at approximately $4 billion after receiving over Rs 15,000 crore from Reliance and Bodhi Tree in April last year, is poised to witness Paramount Global's exit, with Reliance acquiring its stake. Reliance is set to invest $1-$2 billion, primarily to inject funds into the merged entity and buy out Paramount's stake. Disney may reduce its exposure in India by diluting its stake and focusing on reinforcing its position in the US.

Led by Uday Shankar, the merged entity is poised to become a dominant force in TV broadcasting with over 100 channels, including Star Plus, Colors, and Star Sports. Additionally, it will operate two streaming platforms, Disney+ Hotstar and JioCinema. The merger is expected to face scrutiny from the Competition Commission of India due to the combined entity's market share exceeding 40% in both TV and streaming.

The entity will also possess key sports properties such as the Pro Kabaddi League and the Indian Super League. With combined investments of $10 billion in the sports business, including $6 billion for IPL rights alone, the entity will secure TV and digital rights to major sports properties globally. This development follows the collapse of the proposed merger between Sony Group-Culver Max Entertainment and Zee Entertainment last month.

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