India’s competition regulator has given the green light to Reliance Industries Ltd’s Rs 70,350-crore acquisition of Disney’s Indian media assets, provided specific voluntary modifications are implemented. This approval paves the way for the creation of a major media conglomerate, significantly impacting the industry landscape. The merger, once finalized, will consolidate Reliance’s position in the media sector and potentially reshape the media market dynamics in India.
The Competition Commission of India Confirmed Disney & Viacom18 merger:
The Competition Commission of India (CCI) has approved the merger between Disney and Viacom18, valued at Rs 70,350 crore. The announcement was made on the X platform, marking a significant development in the media industry. This merger is set to create a substantial media entity, impacting the sector’s competitive landscape and bolstering the market presence of the combined entity.
CCI wrote, “ Commission approves the proposed combination involving Reliance Industries Ltd, Viacom18 Media Pvt Ltd, Digital18 Media Ltd, Star India Pvt Ltd and Star Television Productions Ltd, subject to the compliance of voluntary modifications.”
In an interview, Dharmendra Kumar, the former chairperson of CCI, Ltd, mentioned that the parties’ commitment to voluntary modifications is expected to expedite the regulatory approval process. He highlighted that these adjustments will significantly enhance the chances of receiving timely approvals, paving the way for a smoother transition and quicker resolution in the regulatory landscape. He said, “ This is a very significant development, as it will lead to a large entertainment conglomerate with a large viewership base.”
Kumar suggested that the CCI might be worried about the emergence of a dominant player in cricket broadcasting. He noted that the proposed changes were probably intended to safeguard competition and guarantee wider availability of cricket coverage throughout India.
Disney to Merge With Viacom18:
Disney-Star has secured exclusive digital and TV rights for ICC events from 2024 to 2027 and IPL broadcasting rights from 2023 to 2028, while Jio holds the IPL streaming rights. The CCI’s ruling arrives just before Reliance Industries’ 47th AGM on August 29, creating a significant backdrop for the annual shareholders’ gathering.
In February, Viacom18, a Reliance Industries subsidiary, and Disney’s Star India combined their media assets to form India’s largest TV and digital streaming entity. The merger, set to be finalized through a court-approved scheme, will integrate Viacom18’s operations with Star India Pvt Ltd (SIPL). Valued at Rs 70,350 crore ($8.5 billion), the joint venture will receive an Rs 11,500 crore ($1.4 billion) investment from RIL to fuel its expansion.
The Reliance-Disney alliance will challenge Sony, Netflix, and Amazon, boasting 120 TV channels and two streaming platforms. The new board will consist of 10 members: five nominated by RIL, three by Disney, and two independent directors. The merger is anticipated to be finalized by late 2024 or early 2025. Nita Ambani will serve as Chairperson, while ex-Walt Disney executive Uday Shankar will take on the role of Vice Chairperson.
The ownership of the joint venture will see RIL holding 16.34%, Viacom18 with 46.82%, and Disney owning 36.84%, with RIL maintaining control as per the merger agreement. On August 28, RIL’s shares remained steady at Rs 2,999 on the NSE. The CCI’s announcement was made after the trading session concluded in Mumbai.
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