By Aditya Kalra and M. Sriram
NEW DELHI (Reuters) -Reliance is advancing talks with Walt Disney to merge its India media businesses, with the Indian firm set to pick up a 51%-54% stake valuing the U.S. giant’s domestic business at $3.5 billion, three sources with direct knowledge of the matter said.
Disney’s India unit was valued by analysts at $15-$16 billion when Disney acquired Fox in 2017.
Bodhi Tree, a joint venture between James Murdoch and a former Disney executive, Uday Shankar, is also in talks to take a stake of around 9% in the merged entity, the sources added.
Reliance, Disney and Bodhi Tree did not immediately respond.
Reliance and Disney, which each have a streaming service as well as 120 television channels between them, have been in talks for months to create an entertainment superpower in the world’s most populous nation.
Under the deal, Viacom18, the broadcast division of Ambani’s Reliance Industries will merge with Disney India businesses. Two of the sources said the final percentage stake numbers could change.
Viacom18’s shareholders also include Paramount Global as well as Bodhi Tree, which invested $500 million in the Indian company last April. Shankar also serves on Viacom18’s board.
Despite India’s large population with growing income, Disney has struggled to make money in the region. Its streaming service makes less than a tenth of its Average Revenue Per User (ARPU) in India compared to the U.S and other international markets.
It has lost subscribers to Ambani’s streaming service, which bought rights to cricket – a wildly popular sport in India – as well as television series such as Succssion, both of which Disney earlier held rights for.
(Reporting by Aditya Kalra in New Delhi and M. Sriram in Mumbai; Editing by Stephen Coates)
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