Merger with Reliance to boost profits, reduce risk in India: Disney CEO Bob Iger
Disney CEO Bob Iger felt the merger of India business with Reliance gives it the opportunity to operate at a significant level
Walt Disney CEO Bob Iger has said a joint venture with Reliance Industries after merging its India business would benefit the company in terms of profit and also "derisk" its business in the Indian market.
The merger deal will create a big entity and help it to stay in the market at a "significant level", said Iger at a Morgan Stanley investor conference earlier this week.
"We had an opportunity to align with Reliance, which is obviously the company that has done very well there and one that we respect. And in doing so, end up owning part of a bigger media company. And we believe that, not only should benefit us in terms of the bottom-line, but derisk us as well there," he said.
Last month, Walt Disney Co. and Reliance Industries announced the signing of binding pacts to merge their media operations in India.
Under the deal, Reliance and its affiliates will hold 63.16% and Disney will have 36.84% in the JV, which will create India's leading media company that will house two streaming services and around 120 television channels.
"We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox. We are one of the biggest media companies in India. But even though it is the most populous country in the world, we felt we want to be there because of that, we also know that there are challenges in that market," he said.
Iger said, the merger will create a big entity and help it to stay in the market at a "significant level".
"So, it's kind of the best of both worlds. We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so," he added.
The transaction values the joint venture at Rs 70,352 crore ($8.5 billion) on a post-money basis, excluding synergies.