Reliance Industries and Walt Disney have commenced antitrust due diligence for their proposed merger in the Indian media and entertainment sector, as confirmed by sources familiar with the matter. Reliance has engaged Khaitan & Co and Shardul Amarchand Mangaldas, while Disney has enlisted AZB & Partners. This development comes as both companies, each operating a major streaming service and collectively possessing 120 television channels, aim to merge and establish a dominant player in the highly populous nation. The entity resulting from the merger is expected to be majority-owned by the Ambani group.
A non-binding term sheet on the deal was signed in late December, with senior Disney executives from Burbank and top Reliance officials from Mumbai meeting in London for this purpose. While Reliance refrained from commenting, dismissing the story as speculative, Disney declined to provide a statement. Law firms Khaitan and Shardul declined to comment as well, while AZB has not yet responded to queries. Notably, any potential merger between Reliance and Disney is likely to face antitrust challenges and rigorous scrutiny. In order to assuage concerns regarding their combined market power, the entities may need to divest certain assets, including television channels.
Antitrust experts have underlined the streaming businesses and their influence over advertising during cricket events as a crucial area of scrutiny in a hypothetical Reliance-Disney merger. Presently, Disney’s India business is grappling with difficulties, compounded by its direct competition with the Ambani group, which offers free streaming of the Indian Premier League cricket tournament. Disney’s Indian operations previously held the digital rights to the tournament.
This proposed merger would be the second major deal to reshape India’s television and streaming landscape, following Sony’s intent to merge its Indian business with Zee Entertainment. It has been reported that early-stage negotiations involved disagreements about the respective valuations of Disney and Reliance’s entertainment unit.
As the talks progress, it remains vital for the companies to navigate potential antitrust concerns and for all stakeholders to analyze the implications of such a merger on the competitive dynamics of India’s media and entertainment industry.
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