The Competition Commission of India (CCI) has approved the merger between Reliance Industries Ltd (RIL) and Disney's Indian media assets, thus paving the way for the creation of a $8.5 billion broadcasting empire that would be the largest in India in terms of reach and financial muscle.
The antitrust watchdog stated that the proposal is subject to the compliance of voluntary modifications. The proposed combination envisages combining the entertainment businesses (along with certain other identified businesses) of Viacom18, part of Asia's richest billionaire Mukesh Ambani’s Reliance group and Star India Private Limited (SIPL), wholly owned by The Walt Disney Company (TWDC).
"As a result of the transaction, SIPL, currently a wholly owned entity of TWDC through its subsidiaries, shall become a joint venture (JV) which will be jointly held by RIL, Viacom18 and existing TWDC subsidiaries," said CCI in a statement on Wednesday.
The CCI, however, did not reveal any voluntary changes made to the original agreement by the two parties.
Last week, it was reported that the Commission has raised concerns that the mega-merger might harm competition due to its proximity influence over cricket broadcast rights.
The report stated that rights worth billions of dollars for the broadcast of cricket would be vested with the merged entity which could potentially peril fair pricing power and control over advertisers. CCI on Wednesday said that the detailed order of the Commission will follow.
The JV, which is expected to be completed in the last quarter of CY2024 or the first quarter of CY2025, will be controlled by Reliance and together with affiliates, Ambani would hold more than 63% stake. Disney would be left with the remaining 37%. RIL will invest Rs 11,500 crore ($ 1.4 billion) into the JV for its growth strategy.
Nita Ambani will be the Chairperson of the JV, with former Disney executive Uday Shankar as the Vice Chairperson.
Experts have previously said that the merger is likely to help Disney arrest a decline in its user base from its India streaming business amidst heavy competition from the likes of Amazon Prime, Netflix and Jio Cinema. The merged entity will have 120 TV channels and two streaming platforms. According to Reliance, the JV will have over 750 million viewers across India.
