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Walt Disney and Reliance Industries have signed a binding pact to merge their media operations in India, according to people familiar with the matter, as the US entertainment giant recasts its strategy amid intense competition in the world’s most-populous country.

The media unit of Reliance, controlled by billionaire Mukesh Ambani, and its affiliates are expected to own at least 61 percent in the merged entity, with Disney holding the rest, the people said, asking not to be identified as the information is not public. 

The latest milestone, along with other details, are likely to be announced early this week, the people said. 

A Disney representative declined to comment. A Reliance spokesperson didn’t immediately respond to a query on the signing of the binding pact.

The stake split between the partners may change, depending on how Disney’s other local assets are factored in by the time the deal is closed, the people said. Reliance shares fell as much as 0.5 percent during trading in Mumbai, broadly in line with the slight decline in the benchmark S&P BSE Sensex.

Disney owns a minority stake in broadcast service provider, Tata Play, which Reliance may consider acquiring, according to local news reports.

Disney has been grappling with challenges in India such as retaining subscribers and securing coveted media assets, while Reliance has cornered a larger slice of the local media and entertainment businesses in recent years. Together, they would make a formidable media behemoth in one of the world’s fastest-growing entertainment markets. 

Ambani’s unit had outbid Disney in 2022 to win the streaming rights for the Indian Premier League, or IPL, cricket tournament and bagged a multi-year pact in April to broadcast Warner Bros Discovery’s HBO shows, which were earlier with Disney.

Clawing Back

While Disney’s streaming service, Disney+ Hotstar, managed to draw record viewers for the Cricket World Cup in October and November, it showed the matches for free in the cricket-crazy nation — a move aimed at clawing back subscribers even if it meant sacrificing revenue. Reliance had streamed IPL matches earlier in 2023 without any charge, drawing viewers in hordes.

Disney has been mulling options for its India business, including an outright sale or setting up a joint venture with partners since July.  

This transaction is part of the larger consolidation efforts in the Indian media and entertainment space. Sony Group planned to merge its local unit with Zee Entertainment Enterprises until differences cropped up on who’ll lead the new merged media giant that ultimately gutted the deal last month.

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