In a non-binding agreement that could potentially transform India’s media industry, Reliance Industries and Walt Disney have agreed to merge their respective media assets in India, according to a report by The Economic Times on Monday.

Citing unnamed sources, the report states that Reliance-owned Viacom18 will set up a subsidiary that will absorb a significant portion of Disney-owned Star India, resulting in a 51:49 joint venture where Reliance holds the majority 51% stake. Disney will hold the remaining 49%. Reliance’s Jio Cinema will also fold into the merged entity, with Reliance likely retaining a controlling interest.

This landmark agreement was signed last week in London by Mukesh Ambani’s trusted confidante Manoj Modi and former Disney executive Kevin Mayer. It caps months of intense negotiations between the two media giants. The mega-merger is expected to undergo further commercial and regulatory reviews before finalization by February 2024.

The joint venture will bring together two of India’s largest media powerhouses. By integrating Star India’s extensive broadcast network spanning sports, entertainment and news channels with Jio Cinema and Viacom18’s broad streaming and broadcast portfolio, the result will be one of the country’s most formidable integrated media conglomerates.

The combined entity is anticipated to pose strong competition to established incumbents like Zee Entertainment and Sony as well as global streaming platforms Netflix and Amazon Prime which have invested heavily in India. Disney is likely to retain a minority investment in the merged company.

An announcement confirming the proposed Reliance-Disney India merger could come as early as next month once details are finalized. The deal underscores how attractive India’s rapidly growing media and entertainment market remains despite recent economic headwinds.

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With access to Reliance’s deep resources and Disney’s global expertise, the merged company seems primed to tap into the vast potential of Indian consumers’ shift towards digital platforms. More details are likely to emerge after binding agreements are signed. But the term sheet signals the dawn of a new era in Indian media.