The much-talked about Disney – Reliance merger has entered its most crucial phase this week. The deadline for the final negotiations approaches soon – as soon as in five days. 17th February is the deadline to conclude the bilateral negotiations, failing which the merger will fall through.
If we look back at the recent falling through of the equally-cacophonous ZEE5 – Sony LIV merger, the deal fell through because the deadline came and went, with no headway in the final negotiations between the two sides. ZEE5 had even requested for an extension of the deadline, but Sony LIV went ahead and terminated the negotiations upon expiry of the deadline.
So the question to be asked is, will the Disney – Reliance merger go the ZEE5 – Sony LIV way?
The Walt Disney Company is on a resurgent track currently. Encouraging 1st Quarter results of the fiscal year 2024 have left the company in a buoyant mood. Revenues have risen, and the company is on track to post profits in its streaming business soon. Not just that, after seeing continous setbacks for several months, Disney Plus Hotstar has posted a considerable rise in subscribers in the 1st quarter results.
To top it all, head honcho Bob Iger has time and again reiterated his desire to stay put in India. Will a resurgent Disney give in to playing second fiddle to Reliance’s Viacom? As per the terms of the deal, Reliance will own 60% of the merged company while The Walt Disney Company will own the remaining 40%.
Out of those 60% Reliance shares, Viacom18 will get 42-45%, making Viacom the largest shareholder in the combined entity. Jio Cinema will also be included as part of the deal. Reliance will make a lumpsum cash payment to Disney, in order to acquire the controlling stake in the new company.
The terms of the deal are definitely titled in Reliance’s favour. As representatives of both sides race against time to conclude negotiations to the satisfaction of both, will the two companies be able to see the merger to fruition?
Or will it fall by the wayside like the ZEE5 – Sony merger?
We’ll have to wait for 17th February for the answer to that question!