The Walt Disney Company, India’s Reliance Industries and Viacom18 on Wednesday announced a binding agreement to form a joint venture, valued at $8.5 billion, that combines the entities’ media operations in India.
It brings Viacom18 (majority owned by Reliance) and Disney’s Star India together, and follows recent reports that Disney had reached an initial deal to sell a majority stake in its India business under an agreement with Reliance and Bohdi Tree Systems.
Under the new joint venture, Reliance, India’s largest private sector company, will own 16.34% of the JV, Disney will hold a 36.84% stake, while Viacom18 will have a 46.82% share. Reliance-controlled Viacom18 also counts Paramount and Bodhi Tree Systems among backers.
As part of the deal, Mukesh Ambani’s Reliance will invest approximately $1.4 billion in the joint venture to help fuel growth. Through the combination, the JV is poised to create a media behemoth in India, counting both sports and entertainment assets across TV and digital platforms. That includes Disney’s Hotstar streaming business in India and Reliance-owned competitor JioCinema, as well as a portfolio of TV networks. According to the companies, the JV will have over 750 million viewers across India. The JV is also getting exclusive rights to distribute Disney films and productions in India, with Disney licensing more than 30,000 content assets. Disney might also contribute certain additional media assets, subject to regulatory and third-party approvals.
The deal is expected to close in the last quarter of 2024 for the first quarter of 2025.
Nita Ambani, wife of Indian billionaire and Reliance chairman Mukesh Ambani, will serve as chairperson of the joint venture. Uday Shankar, a former Disney executive, including president of Asia Pacific and Chairman of Star and Disney India, and current Viacom18 board member, will be vice chairperson of the new JV to provide strategic guidance. Shankar, alongside James Murdoch’s Lupa Systems, co-formed the strategic investor entity Bohdi Tree Systems.
“This is a landmark agreement that heralds a new era in the Indian entertainment industry,” said Mukesh Ambani, chairman and managing director of Reliance Industries, in a statement. “We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”
The deal comes as Disney has struggled to succeed in the populous and competitive India market, where it acquired operations as part of its deal to purchase 21st Century Fox entertainment assets in 2019.The WSJ, citing estimates of people with the deal and third-party analysts, at the time said the India business was valued between $7 billion and $16 billion.
As Disney faced challenges in India, the company had previously been reported to be exploring a potential sale or other options for its assets in the market. Over the past year it experienced a declining Disney+ Hotstar base, ending 2023 with 38.3 million streaming subscribers, compared to 57.5 million Disney+ Hotstar subs at the end of 2022. Its subscriber count was hit hard particularly after Disney was outbid by Viacome18 in June 2022 for digital rights to the highly popular Indian Premiere League (IPL) cricket sporting event, although Disney paid to retain broadcast rights for IPL. And while Disney+ Hotstar still counts a sizable base, it generates significantly lower monthly revenue per user than Disney’s streaming businesses in other markets. In its latest financial report, Disney reported Hotstar monthly ARPU of $1.28 as of the end of December 2023, compared to domestic Disney+ monthly ARPU of $8.15 and international ARPU (excluding Disney+ Hotstar) of $5.91.
“India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company,” said Disney CEO Bob Iger in a statement. “Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”