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Sep 27, 2023

Disney exploring sale or partners for India business, source says

A portion of the signage at the main gate of The Walt Disney Co. is pictured in Burbank, California May 7, 2012. REUTERS/Fred Prouser/File Photo Acquire Licensing Rights NEW DELHI, July 12 (Reuters) -

A portion of the signage at the main gate of The Walt Disney Co. is pictured in Burbank, California May 7, 2012. REUTERS/Fred Prouser/File Photo Acquire Licensing Rights

NEW DELHI, July 12 (Reuters) - Walt Disney (DIS.N) is exploring options to sell or find a joint venture partner for its India digital and TV business, a source with direct knowledge said on Wednesday.

The talks are in a "very, very nascent" stage and no potential buyer or partner has been approached so far, and it remains unclear how the process will pan out, the person added.

"Talks have begun internally (on) what makes sense to do," said the source, adding discussions were being driven by executives at Disney headquarters in the U.S.

Disney did not respond to a Reuters request for comment. The company's shares closed up 1.6% on Tuesday.

The Wall Street Journal was first to report news of Disney's talks and said the company had reached out to at least one bank about ways to help the India business grow, while sharing some of the costs.

The discussions come at a time when Disney has faced increasing pressure due to the emergence of Reliance Industries' (RELI.NS) streaming platform JioCinema, run by Asia's richest man, Mukesh Ambani. He has been marketing his streaming platform by offering free access to Indian Premier League cricket tournament, digital rights of which were earlier with Disney.

Research firm CLSA has estimated Disney+ Hotstar's subscriber base shrank by nearly 5 million users in India after it lost the digital rights for IPL.

Reliance's broadcast venture Viacom18, which runs JioCinema, also struck a deal with Warner Bros in April for HBO and other popular content such as Succession. Several of these top rated shows earlier aired in India on the Disney platform.

Viacom18's shareholders include Reliance, Paramount Global (PARA.O) as well as Bodhi Tree, which is a joint venture between James Murdoch and a former Star India executive, Uday Shankar.

Disney's India business comprises the Disney+ Hotstar streaming service and Star India, which it took over when it acquired the entertainment assets of 21st Century Fox in 2019.

The source, who declined to be named as the talks are confidential, said it will be difficult to find an outright buyer in India as the enterprise value of the India business was seen around $15-16 billion when Disney took over Fox's business.

Star India, which was rebranded as Disney Star last year, encompasses dozens of TV channels and a stake in a movie production company.

Disney, like its peers in streaming and the wider media industry, is cutting costs as macro economic headwinds weigh on its advertising revenue and subscriber growth.

In February, the company said it would cut 7,000 jobs as part of an effort to save $5.5 billion in costs in a sweeping restructuring of the company.

Marathon Oil said on Monday it has entered into a five-year liquefied natural gas (LNG) sales agreement with a unit of Glencore for a portion of its natural gas produced from the Alba Field in Equatorial Guinea, boosting its presence in the European LNG market.

Healthcare payments startup Waystar Technologies on Monday made public its filing for a U.S. stock market flotation and revealed a rise in quarterly sales.

Reporting by Aditya Kalra in New Delhi and Yuvraj Malik in Bengaluru; Editing by Shounak Dasgupta, Shailesh Kuber and Raju Gopalakrishnan

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Aditya Kalra is the Company News Editor for Reuters in India, overseeing business coverage and reporting stories on some of the world's biggest companies. He joined Reuters in 2008 and has in recent years written stories on challenges and strategies of a wide array of companies -- from Amazon, Google and Walmart to Xiaomi, Starbucks and Reliance. He also extensively works on deeply-reported and investigative business stories.

Marathon Oil said on Monday it has entered into a five-year liquefied natural gas (LNG) sales agreement with a unit of Glencore for a portion of its natural gas produced from the Alba Field in Equatorial Guinea, boosting its presence in the European LNG market.

Healthcare payments startup Waystar Technologies on Monday made public its filing for a U.S. stock market flotation and revealed a rise in quarterly sales.