Reliance seeks CCI approval for Viacom18-Star India's $8.5B merger
Reliance Industries has sought approval from the Competition Commission of India (CCI) for an $8.5 billion merger between Viacom18 and Star India Pvt Ltd (SIPL). The proposed merger aims to combine the entertainment businesses of Viacom18, a part of Reliance Industries group, and SIPL, wholly owned by The Walt Disney Company (TWDC). As per a notice filed with the CCI, post-transaction SIPL will transform into a joint venture held by RIL, Viacom18 and existing TWDC subsidiaries.
Reliance Industries assures no adverse impact on competition
Reliance Industries has assured that the proposed merger will not result in any appreciable adverse effect on competition within India. To assist the CCI's evaluation, the company has identified several key markets where significant horizontal overlaps exist. These areas include licensing of audio visual content rights, distribution of broadcast TV channels, provision of audio visual content, and supply of advertising space in India.
Overview of Viacom18 and Star India's operations
SIPL, a wholly-owned entity of The Walt Disney Company, engages in various media activities such as TV broadcasting, motion pictures, and operation of an OTT platform. Conversely, Viacom18 operates in the business of broadcasting television channels and an over-the-top (OTT) platform both in India and globally. Additionally, it is involved in the production and distribution of motion pictures.
Potential impact of the proposed merger
Earlier this year, Walt Disney and Reliance Industries announced their intention to merge their media operations in India, creating a ₹70,000 crore ($8.5 billion) giant. If successful, this merger would result in the largest firm in the Indian media and entertainment sector with over 100 channels in multiple languages, two leading OTT platforms, and a viewer base of 750 million across India.
Leadership and ownership stakes in the joint venture
Nita Ambani, wife of Reliance Industries Chairman Mukesh Ambani, is set to chair the joint venture, with Uday Shankar serving as the Vice Chairperson. In terms of ownership stakes post-merger, Reliance and its affiliates will hold 63.16%, while Disney will retain 36.84%. Additionally, Reliance has committed to invest around ₹11,500 crore into the joint venture to boost the OTT business.
