Disney and Reliance inch closer to mega merger

Walt Disney Co. and Reliance Industries (RIL) are finalizing negotiations to create India's biggest media and entertainment powerhouse. RIL is likely to invest $1.5 billion cash in the newly formed entity, reports say.
However, the projected value has significantly dropped from initial expectations.
Key takeaways:
Merger goal: Establish India's leading media and entertainment company through a stock-and-cash deal.
Valuation: Approximately $4.5 billion, falling short of Disney's initial $10 billion estimate. This is due to rolonged negotiations, lower-than-expected valuation of Disney's Indian assets, and loss of content like IPL and HBO on Disney+ Hotstar.
Ownership structure: Disney retains 40%, Reliance holds 51%, and Bodhi Tree System takes 9%.
Cash component: Viacom18 expected to pay $1.5 billion in cash for its share.
Regulatory hurdles: The Companies Act, Competition Act, and Foreign Investment Regulations will determine legal considerations.
Market impact: Concerns about potential monopoly and increased bargaining power over advertisers, especially with the failed Zee-Sony merger.
While the merger faces regulatory hurdles and concerns about market competitiveness, its completion will significantly reshape the Indian media landscape.