Under Mukesh Ambani's leadership, RIL will invest Rs 11,500 crore ($1.4 billion) in this joint venture. Post-merger, the venture is valued at Rs 70,352 crore ($8.5 billion), excluding synergies.

Disney’s participation in the merger follows its struggles to retain users in its Indian streaming business amidst financial challenges from expensive Indian cricket rights. This merger highlights the difficulties foreign companies face in India's dynamic market.

The value of Disney’s India operations in the merger is pegged at around $3 billion, significantly lower than the $15 billion valuation during its acquisition as part of the Fox deal in 2019. However, a senior Disney source suggests the true value, considering synergies, is closer to $4.3 billion.

The merged Reliance and Disney entity will feature 120 TV channels, two streaming platforms, and cricket rights for major tournaments, catering to India's vast cricket fan base.

“This merger will create a sports giant in India,” said Jinesh Joshi, an analyst at Prabhudas Lilladher. “Reliance will gain significant leverage in ad contract negotiations, and for Disney, partnering with a larger player provides financial stability.”

The companies stated that the merger valued the combined venture at approximately $8.5 billion, without providing further details.

This deal positions Ambani to surpass competitors like Sony, Zee Entertainment, and Netflix in India’s $28 billion media and entertainment industry.

Reliance announced that Nita Ambani, Mukesh Ambani’s wife, will lead the board of the merged entity, with former senior Disney executive Uday Shankar as vice chair.

The combined entity will reach over 750 million viewers across India and serve the Indian diaspora globally.

Disney CEO Bob Iger remarked, “Reliance understands the Indian market and consumer deeply,” highlighting how the deal will enhance their ability to provide a wide range of digital services, entertainment, and sports to consumers.

An internal memo from Disney’s entertainment co-chairs Dana Walden and Alan Bergman, along with ESPN’s Jimmy Pitaro, emphasized India’s significance as a “key market” and one of the “strongest international growth markets of scale” for the company. “We are committed to maintaining a strong presence there,” the memo concluded.

Challenges in India
This deal aligns with Disney’s global efforts to streamline operations. CEO Iger, who returned in November 2022, is restructuring to enhance cost efficiency. Despite this, activist investor Nelson Peltz is pushing for further cost-cutting and a profitable global streaming business.

In November, Iger expressed Disney’s interest in India but also hinted at exploring options. Internal sources admitted to Reuters that Disney misjudged the Indian market.

Disney acquired Hotstar and Star TV channels for $71 billion in 2019 but struggled after losing IPL rights to Ambani in 2022. Despite aiming for 100 million users, Hotstar subscriptions dropped from 61.3 million in October to 23 million in December.

Disney announced a non-cash impairment charge of $1.8 to $2.4 billion, half of which reflects a write-down on Star India assets, as per regulatory filings.