Billionaire Mukesh Ambani's Reliance Industries and Walt Disney have taken a significant step forward in their planned media and entertainment merger by appointing law firms for antitrust due diligence.
Reliance has enlisted Indian law firm Khaitan & Co and Shardul Amarchand Mangaldas, while Disney has engaged AZB & Partners, reported Business Standard.
The move reflects the progress made by the two entities, both major players in the streaming service and television channels space, as they explore merging to create an entertainment powerhouse in India.
The deal, expected to give Ambani's group a majority stake, is likely to face antitrust challenges, with potential shedding of assets to address concerns of combined market power.
A non-binding term sheet for the deal was reportedly signed in London in late December, with senior Disney executives and top Reliance officials involved.
While Disney declined to comment, Reliance did not respond to queries. The law firms, Khaitan, Shardul, and AZB also refrained from providing comments.
The potential merger, if finalised, would mark the second major transformation in India's TV and streaming landscape, following Japan's Sony's plans to merge its India business with Zee Entertainment.
Disney's struggles in India, particularly against Ambani's aggressive free streaming of the Indian Premier League cricket tournament, make the deal crucial for both entities.
Antitrust scrutiny is expected to focus on their streaming businesses and advertising power during cricket events.
Currently, Disney's Hotstar app owns the rights for International Cricket Council's matches in India until 2027, while Reliance's JioCinema app holds the rights for IPL.
However, in preliminary discussions, disagreements have arisen over the valuation of Disney and Reliance's entertainment unit, adding complexity to the potential deal.
Nayan Dwivedi is Staff Writer at Swarajya.
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