The combined market share of the two entities would exceed 40%, with some markets seeing complete dominance and reduced competition.
The Competition Commission of India (CCI) on Wednesday approved the proposed merger between Disney Star, the local unit of The Walt Disney Company, and Reliance Industries-controlled Viacom18, with some voluntary modifications.
This approval, the most crucial for a merger of this size, will pave the way for the largest deal in India's media and entertainment sector, creating an $8.5-billion entertainment network.
“Commission approves the proposed combination involving Reliance Industries Limited, Viacom18 Media Private Limited, Digital18 Media Limited, Star India Private Limited, and Star Television Productions Limited, subject to the compliance of voluntary modifications,”
CCI said in a post on X (formerly Twitter) on Wednesday.
The CCI, however, did not reveal the voluntary modifications proposed by the two parties in the original merger agreement.
According to the agreement signed on 28 February, Viacom18’s media operations will merge with Star India Pvt Ltd (SIPL) through a court-approved scheme of arrangement. The joint venture, valued at ₹70,350 crore on a post-money basis, will see Reliance Industries injecting ₹11,500 crore ($1.4 billion) to support the combined entity's growth strategy. Subsequently, Reliance and its associates will own nearly 56% of the merged entity, Disney will hold 36.84%, and the remaining 7.5% will belong to Bodhi Tree, a joint venture between James Murdoch and former Star India CEO Uday Shankar.
Media reports suggested the combined entity would capture 50% of certain markets, alongside concerns about sports rights. The CCI likely reviewed these issues and issued a notice questioning why divestment should not occur. Typically, merging parties propose voluntary modifications, allowing the CCI to clear the merger.
“In this case, while the specific modifications are not disclosed, they could involve selling off channels or relinquishing some cricket rights,"
said Akshat Kulshrestha, partner at law firm S&R Associates, who specialises in CCI and antitrust laws.
The companies will now have to get approvals from the National Company Law Tribunal (NCLT) and the Ministry of Information and Broadcasting (MIB), and then the business integration phase will begin.
According to experts, getting approval from the NCLT and the MIB will take a few days and is largely procedural.
Post-Merger Outlook
While no sources have confirmed how many employees will be cut after the merger, experts have estimated it to be at least 1,000.
Nita M. Ambani will head the combined venture as chairperson, while Shankar will serve as vice-chairperson.
The joint venture will combine media assets across entertainment (TV channels such as Colors, Star Plus, Star Gold) and sports (Star Sports and Sports18), along with content streaming on over-the-top platforms JioCinema and Hotstar, reaching more than 750 million viewers across India. It will also gain exclusive rights to distribute Disney films and productions in India, with a licence to use over 30,000 Disney content assets.
The merged entity will have approximately 100 TV channels, with 70 under Disney and the rest under Viacom18. The combined resources and content libraries of Disney and Reliance could impact traditional TV networks, especially if the deal shifts advertising revenue and viewer preferences, according to media experts.
The deal gives Reliance access to Disney’s extensive English-language libraries, including its Marvel and Lucasfilm catalogues. Reliance already has content from Warner Bros. Discovery, including acclaimed HBO Originals, and is bullish on regional languages, including the four South Indian languages, Marathi, and Bengali.
Sports will remain a priority for the entity, leaving little room for others in this space.
Source: Mint