Reliance Industries Ltd (RIL) and Walt Disney Co. are finalizing talks on a non-binding term sheet to move ahead with its plan to merge its Indian media and entertainment businesses, executives involved in the matter said. It would give Mukesh Ambani's group a controlling stake in the company, becoming the country's largest media and entertainment company if the deal goes through.
The current plan is to create a spin-off subsidiary of RIL's Viacom18 that will merge with Star India through a share swap, the people cited above said. They said that Reliance aims to own at least a 51% stake in the combined company, with Disney owning the remaining 49%. Since the two companies are similar, RIL will likely pay a fee for the managing bank.
The two sides are also negotiating a business plan to inject $1 billion to $1.5 billion as an immediate investment. The final shareholding structure of the company is determined, and its value is determined based on each party's financial situation.
At least two directors from Reliance and Disney are expected to have equal representation on the board. Uday Shankar-led Bodhi Tree makes Viacom18 the second largest shareholder after Reliance, with 15.97%. We propose two external directors. The people mentioned above said this may change in the coming weeks.
