Reliance and Bodhi Tree explore 60% stake in Disney India merger.

Reliance is in advanced discussions with Walt Disney for the potential merger of their media businesses in India, wherein Reliance aims to acquire a controlling stake of 51%-54%, valuing Disney's Indian operations at $3.5 billion, according to sources familiar with the matter. In 2017, when Disney acquired Fox, analysts valued Disney's India unit at $15-$16 billion. Concurrently, Bodhi Tree, a collaboration between James Murdoch and former Disney executive Uday Shankar, is reportedly considering a 9% stake in the merged entity.

Reliance, Disney, and Bodhi Tree have yet to provide official responses. Both Reliance and Disney operate streaming services and collectively possess 120 television channels. The ongoing discussions between the two conglomerates aim to create a dominant force in India's entertainment sector, given the country's status as the world's most populous nation.

As part of the proposed agreement, Viacom18, the broadcast division of Reliance Industries led by Mukesh Ambani, would merge with Disney's Indian businesses. However, sources caution that the final percentage stakes may undergo adjustments.

Viacom18's shareholders include Paramount Global and Bodhi Tree, which invested $500 million in the Indian company in the preceding April. Uday Shankar also serves on Viacom18's board.

Despite India's substantial population and increasing income levels, Disney has faced profitability challenges in the region. The company's streaming service generates less than a tenth of its Average Revenue Per User (ARPU) in India compared to the U.S. and other international markets. Disney has also lost subscribers to Ambani's streaming service, which secured rights to popular cricket events and television series like "Succession," both of which were formerly under Disney's purview. The merger discussions underscore the competitive dynamics in India's rapidly evolving media and entertainment landscape.