Walt Disney Co. to Sell 30% minority stake in Tata Play to Tata Group

Tata Group will purchase Walt Disney Co.’s 30% minority interest in Tata Play, a subscription television network. The agreement will allow the US media conglomerate to concentrate on merging its Indian unit with billionaire Mukesh Ambani’s media arm, resulting in a $8.5 billion entertainment behemoth. Tata Play Ltd. was valued at around $1 billion in the transaction. After purchasing Disney’s 29.8% stake in the platform, The Tata Group assumed complete control over it.

The acquisition of Temasek by the Tata Group

The holding company of the Indian Tata Group, Tata Sons, bought a 10% share in Tata Play last month for about $100 million, bringing its total ownership stake in the company to 70%. Temasek is a state investment firm in Singapore.

Revolution in the media landscape

The agreement is made at a time when there is significant upheaval in India’s media environment. In late February, Disney finalized a legally binding deal to merge its India division with billionaire Mukesh Ambani’s media company, “Viacom18 Media Pvt.” This will create a $8.5 billion entertainment powerhouse that will command over 750 million viewers and rule the Indian media landscape.

Tata Group’s complete control

After purchasing Temasek Holding Pte’s share of Tata Play earlier this year, the Tata Group increased its ownership to just over 70%. According to its website, Temasek made its initial investment in Tata Sky in 2007. Tata Play’s pre-pandemic target of $3 billion has been significantly lowered to approximately $1 billion as a result of the transaction. Tata Play is still an important consumer-facing business unit for the Tata Group in the media and entertainment industry, even at this lower valuation.

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Tata Play’s history

In 2001, Tata Play (previously known as Tata Sky) was established as a joint venture between Tata Group and TFCF Corp., which was formerly known as Twenty-First Century Fox. The company offers over-the-top (OTT) video streaming via its app and pay television via set-top boxes. On the Tata Son website, it states that it has 23 million connections throughout India. Disney purchased Star India as part of the 2017 acquisition of 21st Century Fox’s Indian assets, which allowed Disney to acquire a stake in Tata Play. Tata Play submitted a confidential application for a domestic IPO in 2022, but the listing has not yet taken place.

Like most pay-TV companies, Tata Play has seen a decline in subscribers as a result of the growth of streaming services and cord-cutting, which has led to the expansion of government-owned Free Dish. The company has been exploring ways to extract value and draw in investors. It even initiated the process of going public in 2020, but ultimately decided against it. The Tatas will continue to own all of Tata Play following the purchase of Disney’s 30% stake.

Tata Play’s compliance with DTH regulations

According to a report by The Economic Times, Tata Play complied with regulations governing direct-to-home (DTH) companies by informing the Ministry of Information and Broadcasting about the change in shareholding. The report states that due to market conditions and difficulties in the DTH sector, Temasek and Disney’s plans to exit Tata Play through an IPO were delayed.

Tata Play is now a 70:30 joint venture between Tata and Disney following Temasek’s departure. The Bloomberg report makes no mention of the shift in the joint venture shareholding ratio following news of the stake sale.

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