Over the past few months, Disney has been exploring its options for its business in India, Disney Star, which was formerly known as Star India and was acquired when Disney purchased 20th Century Fox. Disney Star runs Disney+ Hotstar, along with over 80 linear television channels and much more.

Disney has been talking to multiple companies about potentially selling off some assets as it looks to try to make its business more profitable.

Recently, it was revealed that Disney had signed a new non-binding term sheet with Mukesh Ambani’s Reliance Industries, to merge their Indian operations and create a brand new company, with Reliance Industries owning a controlling stake of 51%, while Disney would hold a minority stake of 49% of the shares.

The two sides have had meetings in London in December, and Reuters is reporting that both companies have appointed law firms and begun their antitrust due diligence to begin the merger. As with most major mergers, there might be some assets that the companies may be required to sell in order to get the merger through Indian regulations.

Disney has appointed AZB & Partners as their lawyers for the deal, while Reliance has appointed Indian law firm Khaitan & Co and Shardul Amarchand Mangaldas.

The merger of Disney Star and Reliance would create one of the largest entertainment companies in India, giving them scale to compete with other companies like Sony and Netflix.

While the rebranding of Hotstar into Disney+ Hotstar in 2020 did provide a huge boost of tens of millions of subscribers to the streaming platform globally, the streamer has had a major problem with profitability, since a Disney+ Hotstar subscriber in India is worth about 70 cents per month, compared to over $6 a month for a Disney+ subscriber in North America or Europe.  Reportedly, Disney miscalculated how Indian consumers are much less likely to switch from free viewing to a paid premium subscription plan.

As part of a cost-cutting measure, Disney decided not to spend billions of dollars on Indian Premier League Cricket rights, which were sold to Reliance’s Jiocinema. This decision resulted in over 20 million people unsubscribing to Disney+ Hotstar, since all they had subscribed for was cricket coverage.

A capital injection of over a billion dollars is expected to be made on the formation of the new company.  Both Reliance and Disney will have a minimum of two members on the board of directors, with some additional members on the board, including someone from Viacom 18, who holds 15% of Reliance, plus some independent members.

Officially, Disney nor Reliance has spoken publically about the deal, but currently, independent valuers and experts are collecting information to get the merger ready, which is expected to be completed in February 2024, though Reliance wanted it to be sorted out by the end of January.

Hopefully, Disney will announce more details on its plans soon, but we could see a major shift in how Disney distributes its content in India.

Do you think Disney partnering with Reliance is a good thing for India?  Let us know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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