Reliance, Walt Disney sign non-binding agreement for Viacom18-Star merger

Reliance Industries (RIL) and Walt Disney Co signed a non-binding term sheet in London last week, the Economic Times reported on Monday.

The merger is expected to be finalised by February.

In July, Kevin Mayer, a former Disney executive, was rehired by CEO Bob Iger as an advisor to assist in managing the company's traditional television business and the ESPN sports network. Present at the meeting were Kevin Mayer and Manoj Modi, a close confidante of Ambani. Over the past few months, both have been engaged in negotiations to finalise the term sheet document, the ET report said.

According to the Economic Times, after completing the signing confirmatory due diligence last week, an official valuation process led by independent valuers will commence. Additionally, legal and tax advisors will be brought on board. It's anticipated that there will be a period of exclusivity lasting 45 to 60 days, with the possibility of mutual extension.

The current strategy involves establishing a subsidiary under RIL's Viacom18 to facilitate the incorporation of Star India through a stock exchange arrangement. Reliance aims to secure the majority stake, holding at least 51% in the combined entity, while Disney will retain the remaining 49%.

Both enterprises are considered to be of comparable size, suggesting that RIL is expected to make a cash payment for the controlling interest. Additionally, Viacom18’s JioCinema will also be a part of the deal.

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