Airtel digital TV, Tata Play explore merger

The Tata and Bharti groups are finalizing the merger of their satellite TV businesses, which have been making losses on sustained migration of subscribers to digital streaming, The Economic Times reported first on Tuesday, citing people with knowledge of the matter.

The nearly $1.6 billion merged entity is expected to be run by Bharti Airtel, which will likely own 52-55% stake, with the remaining held by Tata Play shareholders, including Walt Disney, the ET report said.

Bharti Airtel confirmed the development in a statement to the exchanges on Wednesday.

“Bharti Airtel and Tata group are in bilateral discussions to explore a potential transaction to achieve a combination of Tata group’s direct to home business housed under Tata Play Ltd, with Bharti Telemedia Ltd, a subsidiary of Airtel, in a structure acceptable to all parties,” the statement read, adding that it is “at a discussion stage only.”

Tata Play did not immediately respond to emailed requests for comments.

Tata Play, a 70:30 venture between Tata Sons and Disney, and Airtel had a combined 35 million paid subscribers as of last September, more than half the 60 million subscribers industry-wide at the time, a government report showed.

The two businesses are being valued between Rs6,000-7,000 crore ($690-805 million) each, with revenue exceeding Rs7,000 crore in fiscal 2024, ET reported.

The deal is the second major one in the sector since Dish TV merged with Videocon d2h in 2016, and follows the $8.5 billion-merger of Reliance Industries Ltd’s streaming media assets with Disney’s Indian media assets last year.

Bharti Airtel shares were up 2.2% in intraday trading to Rs1,635.90 apiece at 1pm on Tuesday.