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Walt Disney has bid $454m for the stake in Indias UTV Software Communications, one of Bollywoods largest

entertainment groups, that it does not already own, as it seeks to strengthen its position in one of the worlds fastest growing media markets. Disney, which already controls 50.44 per cent of UTV, said on Tuesday that it would delist the company from Indian exchanges, making it a local subsidiary of the US group. The decision to take full control of UTV comes as a growing number of media and entertainment groups, including NBC, Time Warner, Viacom and Sony, are seeking to expand their presence in India. The Indian market is growing at a very fast pace and for an old media group like Disney it makes a lot of sense to expand there as it will give them the fast growth everyone in the US and Europe is looking for at the moment, said Steve Leitchi, a media analyst at Investec. Given the multiple stages and the nature of the process, a successful outcome is uncertain, said Disney in a statement. A person close to Disney pointed to the complex regulatory environment in India, adding: These types of transactions are notoriously difficult to complete. Disney is increasing its investment in emerging markets, devoting more time to Russia and China, as well as India. The group has invested in local language film productions to tap into a new generation of international moviegoers. But it is also banking on its US-made content appealing to these audiences: this year it held a movie premiere in Russia for the first time to mark the launch of Pirates of the Caribbean: On Stranger Tides. If Disney fails to complete the takeover of UTV, it will explore other options in the country, according to a person close to the company. With the US and European media markets maturing, India has great appeal: in 2010 the Indian media and entertainment industry registered a growth of 11 per cent compared to 2009 as it generated Rs652bn ($14.8bn) in revenues on the back of strong advertising sales, which grew 15.5 per cent to Rs214bn, according to KPMG. The industry is forecast to grow 13 per cent this year and is expected to more than double its revenues to Rs1,275bn by 2015, according to the consultancy group. The resurgence in advertising, growth in subscription revenues, thrust on digitisation, and emerging avenues for content monetisation were the key growth drivers for the Indian media and entertainment industry in 2010, said Rajesh Jain, head of media and entertainment at KPMG. Indias domestic film industry, which comprises Bollywoods Hindi-language offerings and its regional language cousins elsewhere in the country, is the worlds most prolific with about 1,000 new releases a year. However, it only generates a sixth of the overall media and entertainment sectors revenues, according to KPMG. Indias television market has also witnessed a phenomenal growth over the past decade, attracting several foreign investors as it has the worlds third-largest number of homes with pay television, about 100m, serviced by more than 500 channels.

Disney plans to buy a 19.82 per cent stake from the Indian media groups founders, meanwhile the remaining stake will be bought from public shareholders, UTV said on Tuesday. UTVs board has backed Disneys proposal, however, for the deal to be completed it will also need approval from shareholders and regulators. Ronnie Screwvala, UTVs founder and one of the most well respected Indian producers in the world, would become the managing director of Walt Disney India, the company said.