Mukesh Ambani-owned Reliance Industries (RIL) is in talks to acquire a 29.8 percent stake in Tata Play from the Walt Disney Company, according to sources close to the development. The move is seen as part of RIL’s broader strategy to grow its footprint in the Indian television distribution sector.
Tata Sons, the holding company of the Tata group, currently has a 50.2 percent stake in the satellite TV channel. Besides Disney, the other shares are held by Temasek, a Singapore-based fund.
If the negotiations are successful, this would be the first time that the Tata group and the Ambanis are working together in a joint venture. It would also expand JioCinema’s reach on the Tata Play platform. Disney planned to divest its shares during Tata Play’s IPO, but when the listing was postponed, the US company began exploring other exit strategies.
Spokespeople for RIL, Disney and Tata Sons declined to comment.
Temasek was also in talks with the Tata group last year to sell its 20 percent stake in the company, worth about $1 billion. However, no agreement was reached. A source revealed that with the acquisition of the Tata Play stake, Reliance plans to offer its entire JioCinema content bouquet to Tata Play customers.
According to the sources, bankers are currently evaluating the value of Disney’s stake in Tata Play. The satellite TV channel is facing numerous challenges, mainly competition from streaming platforms such as Netflix, Hotstar, JioCinema and Amazon Prime. For the financial year ended March 31, 2023, Tata Play reported a loss of Rs 105 crore on revenue of Rs 4,499 crore. This is in contrast to the previous financial year when the company reported a profit of Rs 68.60 crore on a turnover of Rs 4,741 crore.
A recent report from the Wall Street Journal states that Walt Disney Company has reached a preliminary agreement to sell 60 percent of its linear TV, content and OTT businesses in India to Reliance at a valuation of $3.9 billion. The transaction is expected to be announced once legal due diligence has been completed.
As per the Memorandum of Understanding (MoU) signed between the companies, Disney will retain a 40 percent stake in its Indian operations, while RIL will acquire a 51 percent stake. Bodhi Tree, a venture founded by media scion James Murdoch and former Disney India chief Uday Shanker, will hold a 9 percent stake in the TV network and OTT business.
Disney’s India’s business valuation took a significant hit after Zee Entertainment Enterprises pulled out of a $1.4 billion cricket rights deal with Disney.
First print: February 15, 2024 | 6:15 am IST