The Competition Commission of India (CCI) said today (Aug 28) that it has approved the merger of the media assets of Reliance Industries and Walt Disney Co to create the country’s largest media empire.
The agreement, announced six months ago, has been approved by the ICC with certain modifications proposed by both parties.
In a post on X, the regulator said it had approved 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 compliance with voluntary amendments.”
However, the ICC did not disclose any voluntary modifications to the original agreement made by the two parties.
Under the deal, Reliance and its subsidiaries will hold a 63.16 percent stake in the combined entity that will house two streaming services and 120 television channels.
Walt Disney will retain the remaining 36.84 percent stake.
Walt Disney will retain the remaining 36.84 per cent stake in the merged entity, which will also be India’s largest media company. Reliance Industries has also agreed to invest about Rs 11,500 crore in the joint venture to give it strength to fight off rivals like Sony and Japan’s Netflix.
Nita Ambani, wife of billionaire and Reliance chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be vice chairman. Shankar is a former top executive at Disney and has a joint venture with James Murdoch called Bodhi Tree.
The CCI had raised several issues related to the deal, particularly regarding cricket broadcasting rights and the OTT presence of the proposed merged entity amid anti-competitive concerns. As per regulations, the CCI has to issue a prima facie order within 30 calendar days of notification of the merger to the regulator.
However, it has the power to conduct an in-depth investigation to determine potential anti-competitive issues, and if so, there will be a broader public consultation.
Merger activities in the fast-growing and highly competitive media and entertainment space are slowly gaining pace amid a consolidation trend to stay financially healthy.
Earlier this year, the much-hyped merger between Sony and Zee fell through due to multiple issues and on Tuesday, the two companies announced that the dispute between them had been resolved amicably.
Reliance’s media businesses are currently in Network 18, which owns the TV18 news channels as well as a host of entertainment channels (under the “Colors” brand) and sports. NW18 also has stakes in moneycontrol.com and bookmyshow and publishes magazines. Its subsidiary NW18 owns the CNBC/CNNNews news channels.
Reliance separately owns a film production arm, JioStudios, and majority stakes in two publicly traded cable distribution companies, Den and Hathway.
Disney+ Hotstar was launched in India in 2020, following the acquisition of 21st Century Fox’s entertainment assets for a valuation of $71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and movie channels, such as StarPlus and StarGold, as well as sports channels such as Star Sports.
While Disney+Hotstar rapidly grew its subscriber base initially with cricket match streaming rights (IPL, World Cup), it lost the bidding for digital streaming rights in the 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent more than what Star India had paid on average per match value.
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