NEW DELHI - Reliance Industries and Walt Disney have announced a merger of their television and streaming media assets in India, forming a formidable $8.5 billion entertainment giant, led by Mukesh Ambani of Reliance. With Reliance injecting $1.4 billion into the merged entity, they will hold a majority stake of over 63%, leaving Disney with the remaining share. This move is seen as a strategic step for Disney to address its struggles in the Indian market, particularly with its streaming service and financial burdens from cricket rights payments.

The merger values Disney's India business at around $3 billion, significantly lower than its valuation during the Fox acquisition in 2019. However, the combined entity will possess 120 TV channels, two streaming platforms, and crucial cricket rights, catering to the immense cricket-loving audience in India.

Reliance's deep understanding of the Indian market coupled with Disney's diverse portfolio of digital services and entertainment offerings is expected to benefit consumers. Nita Ambani will chair the board of the merged entity, with Uday Shankar, a former top Disney executive, serving as vice-chair. The entity aims to reach over 750 million viewers in India and globally serve the Indian diaspora.

Despite challenges faced by Disney globally and in India, including pressure to streamline operations and cut costs, the company remains committed to the Indian market. Disney's previous acquisition of Hotstar and Star TV channels aimed to tap into the growing streaming market, particularly with cricket content. However, Ambani's acquisition of IPL streaming rights led to a significant exodus of Disney subscribers.

As a result, Disney is expected to take a non-cash impairment charge, reflecting the challenges it has faced in India. Nonetheless, the merger with Reliance presents an opportunity for both companies to leverage their strengths and better serve the Indian entertainment market.