RIL in talks for stake in Tata Play, may buy Disney’s 30% share

Deal may bring Tatas and Ambanis together for a JV for the first time

Mukesh Ambani-owned Reliance Industries (RIL) is in discussions to acquire a 29.8 per cent stake in Tata Play from the Walt Disney Company, according to sources close to the development. This move is seen as part of RIL’S broader strategy to deepen its footprint in India’s television distribution sector.

Tata Sons, the holding company of the Tata group, currently holds a 50.2 per cent stake in the satellite television broadcaster. Besides Disney, the remaining shares are owned by Temasek, a Singapore-based fund.

If the negotiations are successful, it would mark the first time the Tata group and the Ambanis have partnered in a joint venture. It would also extend the reach of Jiocinema across the Tata Play platform.

Disney had intended to divest its shares during Tata Play's initial public offering, but as the listing was postponed, the American company began exploring other exit strategies.

The spokespersons of RIL, Disney, and Tata Sons declined to comment.

Temasek had also been in discussions with the Tata group last year to sell its 20 per cent stake in the company, valued at approximately $1 billion. However, no agreement was reached. A source revealed that with the acquisition of the Tata Play stake, Reliance plans to offer its entire Jiocinema content bouquet to Tata Play customers.

Bankers, according to the sources, are currently evaluating the value of Disney's stake in Tata Play. The satellite television broadcaster faces numerous challenges, primarily competition from streaming platforms, such as Netflix, Hotstar, Jiocinema, and Amazon Prime. For the financial year ended March 31, 2023, Tata Play reported a loss of ~105 crore on revenue of ~4,499 crore. This contrasts with the previous financial year, when the company reported a profit of ~68.60 crore on revenue of ~4,741 crore.

A recent Wall Street Journal report stated that Walt Disney Company has reached a preliminary agreement to sell 60 per cent of its linear TV, content, and OTT business in India to Reliance at a valuation of $3.9 billion. The transaction is expected to be announced once legal due diligence is completed.

According to the memorandum of understanding (MOU) signed between the companies, Disney will retain a 40 per cent stake in its India business, while RIL will acquire a 51 per cent stake. Bodhi Tree, a venture established by media scion James Murdoch and former Disney India chief Uday Shanker, will hold a 9 per cent stake in the TV network and OTT business. Disney’s India business valuation suffered a significant blow after Zee Entertainment Enterprises withdrew from a $1.4 billion cricket rights deal with Disney.