CCI approves ₹70,350 crore merger of Reliance and Disney India
What's the story
The Competition Commission of India (CCI) has given its approval for the ₹70,350 crore merger between Reliance Industries (RIL) and Disney's Indian media assets. This decision was announced on Wednesday, just one day before RIL's 47th annual general meeting. The approval is contingent upon certain voluntary modifications being implemented by the involved parties.
Merger details
Merger to create India's largest TV, digital streaming platform
The merger was first announced in February 2024, when RIL subsidiary Viacom18 and Star India, Disney's Indian unit, revealed plans to combine their businesses. The goal of this merger is to establish one of India's most extensive TV and digital streaming platforms. As per the agreement terms, Viacom18's media operations will be integrated with Star India Pvt Ltd (SIPL) through a court-approved scheme of arrangement.
Investment plan
RIL to invest ₹11,500 crore in joint venture
The post-merger joint venture is valued at ₹70,350 crore ($8.5 billion) on a post-money basis. To support its growth strategy, RIL has committed to invest ₹11,500 crore ($1.4 billion) into the venture. The combined entity aims to compete with major players like Sony, Netflix and Amazon by offering 120 TV channels and two streaming services.
Leadership structure
New board and leadership for merged entity
The new board of the merged entity will consist of 10 members. RIL will nominate five members, Disney three, and two independent directors. Nita Ambani is set to become the Chairperson of the merged entity, with former Walt Disney executive Uday Shankar joining as Vice Chairperson. The merger is anticipated to be finalized either in Q4 2024 or Q1 2025.
Ownership details
Ownership structure of the joint venture post-merger
Post-merger, the joint venture will be primarily controlled by RIL. The ownership will be divided as follows: RIL will own 16.34%, Viacom18 will hold 46.82%, and Disney will possess 36.84% of the merged entity. This information is based on the terms outlined in the merger agreement between these parties.