Star India deal no big haircut for Disney

Eyebrows were raised when The Walt Disney Co. agreed to merge its India unit with Reliance Industries Ltd (RIL) entities at a valuation of $3.12 billion, since the business was seen to be worth much more when Disney acquired it nearly seven years ago. However, documents accessed by Mint reveal a different picture.

- Gaurav Laghate

On 28 February, RIL, its step-down subsidiary Viacom18 Media and Disney agreed to combine the businesses of Viacom18 and Star India, valuing them at $3.9 billion and $3.12 billion, respectively. Multiple media reports and pundits pointed out that Disney had taken a steep haircut, as Star India, when Disney bought it from Rupert Murdoch in 2019 as part of a $71 billion global deal for 21st Century Fox, was valued much higherat $12-15 billion.

However, the deal with Murdoch in December 2017 had valued Hotstar at just $6 billion, the documents showed, while Murdoch's 30% stake in Tata Play (then Tata Sky) was valued at another $800 million. By the time the deal concluded in 2019, the Indian rupee had weakened and the value ascribed to Star India fell to $5 billion, while that of Tata Play was at $600 million.