The deal is reportedly done and now all that remains is “to dot the i’s and cross the t’s”. The Walt Disney Company has reached an agreement to sell 60% of its India business to Viacom18, the Wall Street Journal reports.
And per WSJ, it has been agreed at a valuation that is even lower than the $4.5 billion that Bloomberg, which first broke the news of the developments, had reported as the value ascribed to Disney’s Indian unit, significantly below the parent company’s initial expectation of $10bn. Per Bloomberg, the new combined entity of Disney Star in India and Reliance will be valued at $11 billion.
According to the WSJ report, the pact values Disney’s India business at $3.9 billion or Rs 33,000 crore and the transaction is likely to close this month. What a massive come down from July 2018, when The House of Mouse completed the takeover of 21st Century Fox for all of $71.3 billion. And the valuation of Fox’s Indian subsidiary Star TV at the time? $16bn!
Bloomberg had earlier reported that both Reliance Industries, the controlling stakeholder in Vaicom18, and Disney had signed a non-binding term sheet last month to merge their India operations.
Per reports, once the deal is done, Viacom18 will hold 51% in the combined entity and Disney 40%, while the remaining 9% will be with Bodhi Tree Systems, a company formed last year between James Murdoch’s Lupa Systems and former Star India CEO Uday Shankar.
It was in July 2023 that Disney started exploring strategic options for its business in India, reflecting on the shift in Star India’s fortunes following Disney’s acquisition of Fox’s entertainment assets. Back then the company was open to both joint venture and sale.
Disney+ Hotstar has seen a consistent drop in subscribers over the last four quarters. From 61.3 million subscribers in September 2022, the number of subscribers in September 2023 fell to 37.6 million.
The losses in subscribers were due to no IPL and no HBO content along with stiff competition from Jio Cinema.
