Reliance Industries Limited (RIL) is looking to rake up a 29.8 per cent stake in Tata Play from Walt Disney, as per reports.

The joint venture, if it goes through, will mark the first partnership between the two conglomerates.

It will also be a noteworthy expansion for Reliance in the television distribution sector, and the overall broadcast landscape.

Tata Sons, which happens to be the holding company of the Tata Group, has a majority stake over 50 per cent in Tata Play. Rest of the shares are owned by Disney and Singapore-based investment firm Temasek, the report said.

It was reported earlier that Network 18 of the Reliance Group is in conversation with Disney for a media merger. This comes on the backdrop of Zee’s merger with Sony being called off by the latter in January this year, after two delays and extensions.

The Deal

As part of the merger, Reliance is looking to expand JioCinema’s reach on Tata’s subscription DTH platform.

While Temasek is looking to divest 20 per cent of stake in the company, which is valued at $1 billion, Disney was also looking for an exit through the now-delayed IPO of Tata Play.

Viacom18 is eyeing the biggest share of the pie in the combined entity. It will also see an investment of $1.5 billion for a 60 per cent stake with  Disney holding the remaining 40 per cent.

Disney and Reliance are reportedly in the last stage of negotiations for finalising the mega stock-and-cash merger, which will create India’s largest media and entertainment business.

The Tata broadcast device and service pool had reported a loss of Rs 105 crore with a revenue of Rs 4499 crore for the financial year ended March 31, 2023. 

History of media mergers 

India saw 118 M&A deals valued at Rs 67,200 crore in 2021, according to the FICCI-EY annual report.

This marks a spike from the 77 deals worth Rs 6,800 crore made in 2020 and 64 deals valued at Rs 10,100 crore, in 2019. 

Over half of the deals by value and volume among these were in broadcasting, and almost a third of them in gaming.

21st Century Fox merged with the Walt Disney company in 2019, after talks began in 2017. This brought in 700 million more viewers from South Asia for Walt Disney, and also won them the Indian Premier League (IPL) rights.

The Reliance Group in 2022 took over the digital streaming rights, which became a win for JioCinema and a fast loss in subscribers for Hotstar. Netflix and Amazon, along with SonyLIV and Zee5 give steep competition to the OTT platform.

What next?

Reliance and Disney, which have been competitors, have 120 television channels and a streaming service which they are mulling on combining through the proposed merger. The media businesses, when combined,  would establish India's largest media and entertainment business.

Apple and Paramount have also been mulling over a partnership amid a converging media landscape.