Business tycoon Mukesh Ambani owned Reliance Industries Ltd (RIL) and Walt Disney have sought clearance from the chief competition regulator — Competition Commission of India (CCI) — for the merger of Viacom18 and Star India Pvt Ltd (SIPL), a wholly owned regional subsidiary of The Walt Disney Company (TWDC).
In February, Reliance Industries and TWDC announced their combination in India worth ₹70,352 crore ($8.5 billion), with the potential to capture a sizeable share in TV and digital streaming. However, the merged entity has claimed that their combined influence will not have appreciable adverse effect on competition.
The deal has been examined closely by the industry players. Once approved, the joint venture will become the largest entertainment entity in India, operating 120 television channels and two streaming platforms. Also, the deal includes cricket broadcasting rights, which arrests most viewership. However, the companies have informed the CCI that the ‘cricket rights‘ were acquired independently via the competitive bidding process, and the competitors would not be in an adverse position. They can bid for the rights upon expiry in 2027 and 2028.
Jefferies sees the Disney-RIL entity will take over 40 percent of the advertising market in both TV and streaming segments.
The newly formed entity would see the share split as Reliance and Viacom18 holding a 63.16 percent stake (16.34 percent by RIL, 46.82 percent by Viacom18) and the remaining by Disney.
Under the newly introduced joint venture, the media undertaking businesses of Viacom18 and Star India would combine into one through a court-approved scheme of arrangement.
RIL has invested ₹11,500 crore in pursuance of this ambitious merger. Nita Ambani will be at the helm of affairs as Chairperson, while Uday Shankar will be Vice Chairman.
To facilitate CCI’s assessment, both companies have identified several key markets where horizontal overlaps are possible such as “provision of audio-visual (AV) content, licensing of AV content rights, distribution of broadcast TV channels, production and supply of films (to third party distributors and exhibitors) for theatrical release in India, and supply of advertising space in India’’.
CCI will review the confidential filing, which can take up to several weeks for clearance.