Disney will trim financial exposure in its loss making venture in one of the world’s most populated countries on the Indian subcontinent by striking a $8.5bn deal to merge its India business with Reliance Industries.

Billionaire Mukesh Ambani’s Reliance, the Indian conglomerate will invest $1.4bn and take a 63 per cent stake in the new company while Disney  will hold  37 per cent. The new entity is valued at $8.5bn.

Disney acquired Star India in 2019 as part of its blockbuster $71bn acquisition of Fox from Rupert Murdoch, which they viewed as one of the most promising business in Murdoch’s portfolio.

Disney’s India Sports business is expected to lose money for years to come as Disney suffered a major setback last year when it lost the right to stream the popular IPL cricket tournament from 2023-27, in a record $6.2bn auction. While Disney kept the broadcast TV rights, the streaming rights went to JioCinema – a joint venture between Reliance Industries and Viacom18,  run by James Murdoch and former Disney India chief Uday Shankar. India;s film-loving public is very price conscious market where annual subscriber revenue remains low. The deal follows the collapse of an agreement between Sony and India’s Zee Entertainment this year, which would have care a $10bn media powerhouse to rival Reliance-Disney new entity. According to Iger Reliance’s “ deep understanding of the Indian market and consumer and Disney  would create one of the country’s lading media companies”.

Ambani’s wife Nita  was appointed chair of the new entity while Shankar  a director of Viacom18 was made vice-chair.