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Merger Announcement: Walt Disney and Indian conglomerate Reliance have announced plans to merge their respective media businesses in India, creating an $8.5 billion joint venture.

Leadership Roles: Nita Ambani, wife of Reliance’s chairman Mukesh Ambani, will chair the joint venture, while Uday Shankar, a board member of Viacom18, will serve as vice chairperson.

Combination of Units: The merger involves combining Star India and Viacom18 units into the newly created Star India joint venture, with a valuation of approximately $8.5 billion, excluding synergies. This venture is anticipated to reach over 750 million viewers in the Indian market.

Completion Timeline: The transaction is subject to regulatory, shareholder, and customary approvals, with completion expected in either the last quarter of the current year or the first quarter of 2025.

Ownership Structure: After the transaction, Reliance will hold a controlling interest in the joint venture and will invest $1.4 billion into its growth strategy. The ownership structure will consist of 16.34% for Reliance, 46.82% for Ambani’s Viacom18, and 36.84% for Disney.

CEO Statement: Walt Disney CEO Bob Iger expressed enthusiasm about the venture’s potential to create long-term value, citing India’s status as the world’s most populous market.

Financial Implications: Disney expects to incur non-cash pre-tax impairment charges between $1.8 billion to $2.4 billion in the current quarter, with a significant portion attributed to a write-down of the net assets of Star India.

Board Composition: Under the merger agreement, the joint venture’s board will comprise three directors from Disney and five from Reliance. Additionally, two independent directors will be appointed.

Market Strategy: Despite subscriber losses and cost-cutting measures, Disney remains committed to the Indian market, aiming to strengthen its position through this merger.

Future Outlook: CEO Bob Iger expressed openness to exploring opportunities in India, emphasizing Disney’s desire to maintain a presence and enhance its business in the country.(Report: CNBC)

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