The merger of reliance industries and Disney India has been the most anticipated since the announcement of the merger. The latest speculation is reliance on plans to acquire a 50% stake in Disney with Disney holding only 40% after the merger but previously there was another speculation that reliance in talks to obtain a 51% stake in Disney India. This article brings you how the talks of a merger taking place between the 2 companies in detail.
Reliance And Disney India Merger:
Reliance Industries Limited (RIL) is ready to obtain a 50% stake in Disney India ahead of the merger with an official announcement coming out within days. The valuation of Disney India saw a rise in its valuation after the speculations came out about the merger leading to a $18 billion valuation of the company which was $15 – $16 billion previously.
It is said that Reliance will be acquiring a stake of between 50%-54% with 50% being fixed and the other 1% -4% depending on the terms and conditions of both companies. The remaining valuation around will be 45% where Disney holds a 40% fixed stake while the remaining stake will be acquired with a partnership between James Murdoch and Uday Shankar (former Disney Executive).
Disney Valuation Fall:
The merger was the only option for Disney due to huge competition from Viacom 18 for acquiring the digital and satellite rights of cricket. Disney was only able to acquire satellite rights for Rs48,390 crores of all IPL matches & India’s away matches which resulted in the loss of subscribers on the digital platform Hotstar.
This resulted in huge revenue degradation where IPL has been the huge market of Disney India after it brought both digital and satellite streaming rights for a record price previously.
However, the company was unable to renew its digital rights. Disney India has lost the survival battle in the market with low valuation and IPL digital rights with competition from Viacom 18 leading to a merger or stop the services in India.
Disney India opted to merge with Viacom 18 if they agreed. While Viacom 18 have brought the Digital rights of IPL and India’s home matches with Rs 23,758 crores Disney India and Sony failed in bidding of rights.
What Will Happen After The Merger:
Reliance Industries Limited and Disney India are ready to sign the deal this month which will be creating a huge market share of a single company in India.
The reports claimed that the merger talks have been completed with final formalities left before the huge merger of media companies. The merger will give a majority market share in the $28 billion market valuation after the estimated merger of Sony and Zee Entertainment failed. The merger of both companies will provide occupancy of the majority market share of media in India.
Viacom 18 have been streaming the IPL for free which gained huge views and market share that led to Disney India’s subscribers not opting for renewing the subscription plan after it lost bidding.
This caused an uneven situation in Disney digital media and a lost chance of survival ultimately however Disney made a wise decision to not leave India and merge with Viacom18 which is set to become the largest company with a huge market share in media.
Conclusion:
As the reports suggest the merging is likely to take place this month itself it is still unknown whether in which platform the IPL will be streamed for free. Even though Reliance was streaming the IPL for free through JIO CINEMA it is suspicious whether they will charge for streaming or not as the merge takes place. The charge of the subscription plan goes to only one company since it was merged and Jio Cinema has been already charging users for its premium content from last year.
So, it depends on the company’s choice to stream IPL for free or subscription. Even if the company plans to charge through subscription users have to be ready to pay as there is no other option to watch the popular sport on Mobiles.
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