Reliance, Disney start antitrust diligence on India media merger

The appointments are the latest sign of progress as Reliance and Disney, which each have a major streaming service as well as 120 television channels between them, look at merging into an entity to create an entertainment superpower in India.

New Delhi: Indian billionaire Mukesh Ambani's Reliance Industries and Walt Disney have appointed law firms and started antitrust due diligence of their planned Indian media and entertainment merger, four people familiar with the matter said.

Reliance has appointed Indian law firm Khaitan Co and Shardul Amarchand Mangaldas, while Disney has roped in AZB Partners, the people said.

The appointments are the latest sign of progress as Reliance and Disney, which each have a major streaming service as well as 120 television channels between them, look at merging into an entity to create an entertainment superpower in the world's most populous nation. Ambani's group is expected to have a majority stake in the entity.

A fifth source said senior Disney executives from Burbank headquarters and top Reliance officials from Mumbai travelled to London in late December and signed a non-binding term sheet on the deal.

Disney declined to comment and Reliance did not respond to Reuters queries. Khaitan and Shardul also declined to comment, while AZB did not immediately respond to Reuters queries.

Any possible merger between Reliance and Disney is likely to face antitrust challenges and could draw intense scrutiny, with assets such as TV channels likely to be shed to assuage concerns of their combined market power, Reuters has reported.

Three of the sources familiar with the Reliance-Disney merger due diligence said the work for antitrust review was in initial stages.

If a deal was struck between Reliance and Disney, it would be the second to reshape India's TV and streaming landscape as Japan's Sony also plans to merge its India business with India's Zee Entertainment.

Disney's India business has been struggling, with Ambani locked in fierce battle with the US company by offering free streaming of Indian Premier League cricket (IPL) tournament, whose digital rights were once with Disney in India.

A key area of antitrust scrutiny for a Disney-Reliance merger would be their streaming businesses and their power over advertising during cricket, antitrust experts have told Reuters.

Disney Hotstar app still owns the rights for International Cricket Council's matches in India until 2027, while Reliance's JioCinema app has the rights for IPL.

In early-stage talks, company executives have disagreed over whether Disney or Reliance's entertainment unit is more highly valued, Reuters has reported.