In Short:
- CCI Approval: The Rs 70,350-crore Reliance-Disney India merger has been greenlit by India’s competition watchdog, with voluntary modifications to address competition concerns.
- Strategic Impact: The merger creates India’s largest TV and streaming entity, positioning it against Sony, Netflix, and Amazon.
- Leadership and Timeline: Nita Ambani will chair the merged entity, expected to finalize by Q1 2025.
India’s competition regulator, the Competition Commission of India (CCI), has granted approval for the Rs 70,350-crore merger between Reliance Industries Ltd and Disney’s Indian media assets, marking a significant milestone in the Indian entertainment industry. This merger, which brings together the media operations of Reliance’s Viacom18 and Disney’s Star India, is set to create a formidable entity in the TV and digital streaming space.
Key Details of the Merger
The CCI’s approval comes with certain voluntary modifications pledged by the merging parties, aimed at addressing potential competition concerns. These modifications are expected to smooth the path for regulatory clearance, with former CCI chairperson Dharmendra Kumar noting that the swift approval underscores the merger’s significance.
“This merger will lead to the creation of a massive entertainment conglomerate with an extensive viewership base,” Kumar said in an interview with CNBC-TV18. He highlighted that the CCI likely focused on ensuring that the merger does not result in an unfair dominance, particularly in the cricket broadcasting sector, which is a highly competitive and lucrative space in India.
Disney-Star currently holds exclusive digital and television rights to major cricket events, including ICC tournaments from 2024 to 2027 and the Indian Premier League (IPL) broadcasting rights from 2023 to 2028. Meanwhile, Jio, a Reliance subsidiary, has secured the IPL streaming rights, making cricket a critical aspect of the merger discussions.
Strategic Impact and Future Outlook
This merger sets the stage for the creation of India’s largest TV and digital streaming entity, positioning the combined Reliance-Disney group to compete directly with industry giants like Sony, Netflix, and Amazon. The new entity will boast a portfolio of 120 TV channels and two streaming services, significantly expanding its reach across the Indian market.
Under the terms of the merger, Viacom18’s media operations will be integrated with Star India Pvt Ltd through a court-approved scheme of arrangement. The joint venture, valued at Rs 70,350 crore ($8.5 billion), will see Reliance Industries infusing Rs 11,500 crore ($1.4 billion) to fuel the venture’s growth strategy.
The merged entity’s governance will feature a 10-member board, with Reliance Industries nominating five members, Disney three, and two independent directors. Nita Ambani, a key figure in Reliance Industries, will assume the role of Chairperson, while Uday Shankar, a former Walt Disney executive, will join as Vice Chairperson.
In terms of ownership, Reliance Industries will hold a 16.34 percent stake in the merged entity, Viacom18 will control 46.82 percent, and Disney will retain a 36.84 percent stake. Despite the minority shareholding, Reliance will maintain control of the joint venture as per the merger agreement.
Market Response and Next Steps
The CCI’s announcement was made after trading hours on August 28, with RIL’s shares remaining steady at Rs 2,999 on the NSE. This development comes just ahead of Reliance Industries’ 47th Annual General Meeting (AGM), slated for August 29, where further details and strategic insights into the merger may be disclosed.
The merger is expected to be completed by the last quarter of 2024 or the first quarter of 2025, subject to the fulfillment of all regulatory requirements. Once finalized, the Reliance-Disney entity will emerge as a dominant force in the Indian media landscape, reshaping the competitive dynamics of the industry.
This merger is poised to not only redefine the entertainment experience for millions of Indian viewers but also set a new benchmark in the global media industry.
