Media heavyweight Disney has announced a deal to merge its Indian assets – the Star India linear broadcaster and Disney+ Hotstar streaming service – with those of Reliance Industries, the majority owner of Viacom18 and OTT platform Jio, to create an $8.5 billion media giant.

The deal comes months after it was reported that Disney was looking to either sell off Star and Hotstar or find a strategic partner for them and was nearing a deal that would see Reliance – controlled by billionaire Mukesh Ambani – take a controlling stake.

In a joint statement, the companies said Reliance Industries will control over 60% of the new unit – 16% directly and 47% via Viacom18 – while Disney will control 37%.

Reliance will invest another $1.4 billion into the new unit as growth capital and Disney will look to contribute assets after gaining regulatory approvals. Reliance’s Nita Ambani, wife of Mukesh, will serve as chair of the merged entity, while former Disney India chair Uday Shankar will become vice chair and strategic advisor.

The merger, which will combine both streaming services, India’s leading pay-TV platform, and over 100 linear channels, has the potential to overhaul the Indian media and entertainment industry with a 40% market share.

The two companies said: “The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.

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“The JV will also be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.”

The companies added they expect the deal to be completed by the fourth quarter of this year or the first quarter of 2025, pending regulatory approvals.

Walt Disney Co. chief executive Bob Iger said: “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company.

“Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country’s leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content.”

Mukesh Ambani, chair and managing director of Reliance Industries, added: “This is a landmark agreement that heralds a new era in the Indian entertainment industry.

“We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group.”

The merger ends an intense period of competition between the two companies as they fought to secure major sports rights in the country.

Viacom18 has over recent years been muscling in on Star India’s sports rights portfolio, and now holds domestic streaming rights to the prestigious Indian Premier League (IPL) Twenty20 cricket tournament – Hotstar was the previous rightsholder.

Through its JioCinema service, Reliance offered action from the 2023 IPL earlier this year to viewers for free.

Viacom18 also, through a late-August auction, now holds exclusive linear and digital rights to home Indian national and domestic cricket matches until March 2028.

Again, the previous main domestic rightsholder for Indian home national team cricket was Star.

Star has had to adapt to avoid viewers switching – or continuing to switch – to Reliance and Viacom18 and aired the men’s Cricket World Cup in India for free to its mobile subscribers.

In terms of other premium sporting properties, Viacom18 also holds rights to the Paris 2024 Olympics through a deal struck last December, as well as the Indian Super League soccer competition.