Walt Disney Co.'s India unit valued at $4.5 billion in Reliance merger
The current valuation at over $4.5 billion is significantly below Disney's initial expectation of $10 billion.
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Looks like, Indian media will not be seeing any $10 billion M&A deals in 2024. First it was the scrapping of the Zee-Sony merger and now the valuation of issue in the other big merger- Reliance and Walt Disney Co.'s India unit.
Walt Disney Co.'s India unit is undergoing challenges in its anticipated merger with Mukesh Ambani's media conglomerate, valuing at $4.5 billion approximately is significantly below Disney's initial expectation of $10 billion.
Following prolonged negotiations and a non-binding agreement with Reliance Industries, Disney's assets in India appear to be assessed at a considerably lower value than initially envisioned. Insiders familiar with the matter revealed these details on the condition of anonymity.
Experts also blame a write-off of revenue that Zee owed Disney for a cricket TV rights sale to cause the drop in valuation. Zee is reportedly unable to pay the amount for securing these rights.
As per Bloomberg reports, the new combined entity of Disney Star in India and Reliance will be valued at $11 billion.
Back in July, 2023, Disney started exploring strategic options for its business in India, reflecting on the shift in Star India's fortunes following Disney's acquisition of Fox's entertainment assets.
Back then the company was open to both joint venture and sale.
In an effort to facilitate the growth of its India business and alleviate some financial burden, Disney had engaged in discussions with a lot of stakeholders including investors and banks.
