The Walt Disney Company (NYSE:DIS) has formed a joint venture (JV), valued at $8.5 billion, with Reliance Industries Limited (RIL), a multinational conglomerate based in India. As part of the deal, Reliance’s media business, Viacom18, will merge with Disney’s Star India unit to form Star India Private Limited.
By combining Viacom18’s media expertise, innovative technology, and diverse content with Star India’s resources, the JV will offer consumers a wide range of domestic and international content, as well as enhanced sports live-streaming capabilities.
Detailed JV Terms
In other deal terms, Reliance will invest $1.4 billion in the joint venture, while Disney may contribute additional media assets after securing the necessary regulatory and third-party approvals. Also, the joint venture will oversee the distribution of Disney films and productions in India.
The transaction is subject to regulatory and shareholder approvals. Furthermore, the deal is expected to be completed either in the final quarter of 2024 or the first quarter of 2025. Investors should note that upon completion, the JV will be controlled by RIL, with ownership distributed as follows: 16.34% by Reliance, 46.82% by Viacom18, and 36.84% by Disney.
Is Disney a Buy, Sell, or Hold?
The deal is expected to bring respite to DIS as its streaming business in India has long struggled to grow its subscriber base. Also, the company’s cost-cutting moves and efforts to turn around business bode well for long-term growth.
Overall, DIS stock has 17 Buys, four Holds, and one Sell recommendation for a Moderate Buy consensus rating. Analysts’ average DIS stock price target of $116.71 implies a limited upside potential of 5.33% over the next 12 months. Disney stock has rallied over 31% in the past six months, outperforming the S&P 500’s (SPX) gain of 12.7%.
