Reliance-backed Viacom18 has reached an agreement to buy 60% of Disney’s India unit, WSJ reported Thursday citing unnamed sources, creating a pathway for the Indian conglomerate to form a $10 billion media giant in the South Asian market.
The deal, which WSJ says will close this month, values Disney’s India unit at $3.9 billion, the report said, less than half of what Disney had originally hoped. Earlier this week, Reliance declined to comment on its engagement with Disney.
Viacom18 is a joint venture among Mukesh Ambani’s Reliance Industries, Paramount Global and James Murdoch’s Bodhi Tree Systems. According to the agreement, Disney will retain 40% ownership in its India unit, whereas Reliance will acquire a 51% stake and Bodhi Tree will hold 9%, the report said.
In 2019, Disney acquired 21st Century Fox’s entertainment assets for $71.3 billion, a move significantly bolstered by the inclusion of Star India.
The deal was integral to Disney’s global streaming expansion, handing it broadcast and streaming rights to the Indian Premier League cricket matches, a multitude of multilingual TV channels and an interest in a Bollywood film production company. At the time of acquisition, Star’s Hotstar had amassed about 150 million monthly active users.
While Hotstar dominated the Indian video streaming landscape for several more quarters, things have tapered off since as Reliance-backed Viacom18 has grown in popularity after securing the five-year rights to stream IPL cricket matches for about $3 billion. Disney paid $3 billion for the same five-year rights, but for broadcasting the content on TV.
Reliance has poached many top leaders and engineering talent to ramp up JioCinema in the last year, and has populated the on-demand streaming service with premium content from HBO and NBC.
The merger with Viacom18 reunites Rupert Murdoch’s son James and former Star India CEO Uday Shankar with a business they spent years building. Murdoch helped grow Star India when he was chairman of its former parent Sky, then part of Fox. Shankar led Star India for a decade until 2020.
Shankar and Murdoch, who previously launched a fund called Lupa, formed Bodhi Tree in 2021 with a $1.7 billion backing from Qatar Investment Authority. Bodhi Tree initially agreed to invest $1.78 billion in Viacom18, but later cut the size of the investment to about $528 million.