Reliance, Disney sign non-binding agreement for mega deal

Mukesh Ambani-led Reliance Industries reportedly signed a non-binding term sheet with Walt Disney Co last week in London to create the country’s largest media and entertainment business. The 51:49 stock and cash merger is expected to be finalised by February even as Reliance is keen to wrap it up earlier by January-end.

According to a report in the Economic Times, Kevin Mayer, former Disney executive and current advisor and Manoj Modi, close confidante of Ambani, who have been negotiating the term sheet for months, were present at the meeting.

As per the report, valuation exercise by independent valuers will officially begin soon. The plan is to create a step-down subsidiary of RIL’s Viacom18 that will absorb Star India via a stock swap, the report added.

Reliance is expected to be the larger shareholder with at least 51 per cent, while Disney will own 49 per cent in the merged company. JioCinema will also be part of the deal. RIL is likely to pay cash for the controlling stake, the report stated.

The board is expected to have equal representation from Reliance and Disney. Viacom18’s second largest shareholder after Reliance, Uday Shankar-led Bodhi Tree, is likely to get a seat. Moreover, a minimum of two independent directors are being considered, the report added.

Disney’s India business lost the online rights to the IPL tournament from 2023-27, even as it won the broadcast TV rights. The online streaming rights went to JioCinema. Business Today