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CCI did not disclose the voluntary amendments made by both parties to the original deal. | Photo Credit: Reuters
The Competition Commission of India on Wednesday (August 28, 2024) said that it has Merger of media assets of Reliance Industries and Walt Disney Company To build the country’s biggest media empire.
The deal, announced six months ago, had faced scrutiny by the anti-trust regulator and has been approved after both parties proposed certain modifications to the original transaction structure.
In a post on X, the regulator said it has “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 the voluntary amendments”.
However, the Competition Commission of India (CCI) did not disclose the voluntary amendments made by both parties to the original deal.
Under the deal, Mukesh Ambani-led Reliance Industries and its affiliates will hold a 63.16 per cent stake in the combined entity that will have two streaming services and 120 television channels.
Walt Disney will hold the remaining 36.84% stake in the combined entity, which will also be India’s largest media house.
Reliance Industries has also agreed to invest around Rs 11,500 crore in the joint venture to give it a strength to compete with rivals like Japan’s Sony and Netflix.
Nita Ambani, wife of billionaire and Reliance Chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be the vice-chairman.
Shankar is a former top Disney executive and has a joint venture with James Murdoch called Bodhi Tree.
The CCI had raised various questions related to the deal, particularly with regard to cricket broadcast rights and OTT presence of the proposed combined entity amid anti-competition concerns.
As per the rules, the CCI has to pass a prima facie order within 30 calendar days of the merger being reported to the regulator. However, it has the power to conduct a deeper investigation to find out potential anti-competitive issues, and in that case, there will be extensive public consultation.
Merger activity is slowly picking up pace amid the trend of consolidation to remain financially healthy in the fast-growing and highly competitive media and entertainment sector.
The much-talked-about merger of Sony and Zee earlier this year fell through due to several issues, and on Tuesday, the two companies announced that the dispute between them has been resolved amicably.
Reliance’s media ventures are currently concentrated in Network 18, which owns the TV18 news channel as well as entertainment (under the ‘Colors’ brand) and sports channels. NW18 also has stakes in Moneycontrol.com and BookMyShow and publishes magazines.
Its subsidiary NW18 owns the CNBC/CNNNews news channel.
Reliance separately has a film production arm – JioStudios, and majority stakes in two listed cable distribution companies DEN and Hathway.
Disney+ Hotstar was launched in India in 2020 after it acquired 21st Century Fox’s entertainment assets at a valuation of $71.3 billion, following which it took over the operations of Star India and Hotstar. This included entertainment and cinema channels such as StarPlus and StarGold, and sports channels such as Star Sports.
Although Disney+ Hotstar initially rapidly grew its subscriber base with streaming rights for cricket matches (IPL, World Cup), it lost the bid for digital streaming rights in the 2023-27 cycle, which was won by Reliance-backed Viacom 18 for $720 billion, 12.92% higher than the amount paid by Star India at an average price per match.
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