Introduction

Walt Disney Co. (DIS) revealed a groundbreaking agreement on Wednesday, teaming up with India’s Reliance Industries Ltd. (500325) and Viacom 18 Media Private Ltd. The collaboration will merge the digital streaming and TV assets of both companies in India, marking a significant move in the entertainment industry.

Valuation and Investment

The joint venture is set to be valued at approximately $8.5 billion, with Reliance committing to invest $1.4 billion in the JV at closing. In addition, Disney has hinted at the possibility of contributing certain additional media assets to further enhance the collaboration.

Shareholder Breakdown

Following the completion of the deal, Disney will hold a 36.8% stake in the JV, while Viacom 18 will retain 46.8% ownership. Reliance, on the other hand, will possess 16.3% of the joint venture, creating a well-balanced partnership.

Exclusive Distribution Rights

An integral aspect of the agreement includes granting the joint venture exclusive rights to distribute Disney films and productions across India. This strategic move aims to leverage India’s status as the world’s most populous market, opening doors to endless possibilities for long-term growth and value creation for the company.

Statement from CEO

Disney’s Chief Executive Officer, Bob Iger, expressed his enthusiasm for the joint venture, emphasizing the boundless opportunities it brings. He highlighted India’s immense potential as a key market and outlined a vision for harnessing this potential through strategic partnerships and innovative solutions.

Market Response

Despite the significant announcement, Disney’s stock experienced a slight dip of 0.4% in premarket trading, reflecting the market’s initial reaction to the news.

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