If the deal goes through, Reliance Industries Ltd (RIL) and Walt Disney Co. signed a non-binding term sheet in London last week to move forward with plans for the country's largest media and entertainment business. According to people in the know, the 51:49 stock and cash merger in favour of Mukesh Ambani's group is expected to be finalised by February, with all commercial ratifications and regulatory approvals completed by then.
Kevin Mayer, a former Disney executive brought back in July by chief executive Bob Iger as an adviser to help him navigate the company’s legacy television business and the ESPN sports network and Manoj Modi, a close confidante of Ambani, were among those present in the meeting. Both have been negotiating for months now to finalise the term sheet document.
Following last week’s signing confirmatory due diligence, valuation exercise by independent valuers will officially begin and legal and tax advisors brought on board. There is likely to be a 45-60 day exclusivity that can be mutually extended.
The development comes even as the fate of the $10 billion merger between Zee Entertainment Enterprises and Sony Group Corp.’s local unit, the biggest in India media amalgamation announced till date - hangs in balance even after two years.
ET was the first to report about the proposed RIL-Disney term sheet in its December 12 edition.
A Disney India representative declined to comment. Emails sent to Reliance on Saturday evening received no response until press time on Sunday.
According to the people cited above, the current plan is to establish a step-down subsidiary of RIL's Viacom18 that will absorb Star India through a stock swap. Reliance is vying for a majority stake in the merged company, with Disney owning the remaining 49%, they said. Because both businesses are considered comparable in size, RIL is likely to pay cash for the controlling stake. Jio Cinema, a subsidiary of Viacom 18, will also be included in the transaction.
