Walt Disney Co and Reliance Industries Ltd (RIL) have reportedly signed a non-binding term sheet to proceed with their plans to merge their Indian media operations.
The duo signed the term sheet in London last week, according to media reports.
The joint venture will see RIL getting a majority stake. It is likely to be a stock-and-cash deal, and the parties want to complete the exercise by February.
There were no official comments from RIL on the signing of the term sheet.
However, sources said the discussions were still ongoing, and a likely deal was still 2-3 months away.
Kevin Mayer, an ex-Disney executive brought back in July by CEO Bob Iger as an advisor, is reportedly leading the negotiations on behalf of Disney.
Reliance is represented by Manoj Modi, the close confidant of RIL chairman Mukesh D Ambani.
Following the signing of the term sheet, a valuation exercise will commence.
Since July this year, Walt Disney has been examining options for its business in India that have included an outright sale or a joint venture for its assets comprising the sports rights and regional streaming service Disney+ Hotstar.
Recent reports have said that Disney has ascribed an enterprise value of $ 10 billion to the media business in India. However, Reliance feels the value of the assets is between $7 billion and $8 billion.
Last month, Iger said the media giant would like to stay in India, but is considering its options.
Speaking after the company declared its Q4 results, Iger said in India, its linear business (cable TV business) is doing well.
If the merger is through, it would create India's one of the largest media houses, which would have over 70 television channels run in eight languages from Star India and around 38 channels from Viacom 18, the step-down firm of RIL. Besides, this would also have two streaming platforms — Disney+ Hotstar and JioCinema.
The development comes at a time another mega-merger in the media & entertainment space is facing some uncertainty.
The proposed amalgamation of Zee and Sony had recently seen the homegrown entity disclosing that it has begun discussions with Culver Max Entertainment, earlier known as Sony Pictures Networks India, to extend the December 21 deadline.
