India’s Competition Commission has given the green light to the proposed merger between Reliance Industries Limited (RIL) and key entertainment assets of The Walt Disney Company (TWDC) in India, with some voluntary modifications. This deal, announced in February, will bring together the entertainment businesses of Viacom18, a part of Mukesh Ambani’s RIL group, and Star India Private Limited (SIPL), a Disney subsidiary. Post-transaction, SIPL will become a joint venture held by RIL, Viacom18, and existing TWDC subsidiaries.
RIL, a diversified conglomerate led by Mukesh Ambani, will contribute its media and entertainment portfolio to the merger. Viacom18’s assets include TV broadcasting, streaming platform JioCinema, advertising sales, merchandising, and film production and distribution. On the other hand, SIPL brings its TV broadcasting arm, content production capabilities, streaming platform Disney+ Hotstar, and advertising business to the table. Additionally, Star Television Productions Limited (STPL), a Disney entity based in the British Virgin Islands, is also part of the deal.
The Competition Commission has not disclosed the specifics of the modifications it is requesting, but it has expressed concerns over the potential dominance of the enlarged group in cricket rights. Both Disney and RIL were competitors in the bidding for multi-year packages of rights to the popular IPL tournament, driving up the deal’s value to around $6 billion. Cricket is a significant driver of customer acquisitions in India, and the two companies have a strong hold on cricket rights in the country.
The proposed merger has already received clearance from the National Company Law Tribunal in May, allowing the companies to proceed with a shareholder meeting on the matter. A 75% majority vote from participating shareholders is required for the deal to be finalized. This merger is expected to reshape the Indian media landscape by combining two major players in the market. The merged entity would have 120 TV channels and two streaming services, putting it in a competitive position against major players like Sony, Zee Entertainment, Netflix, and Amazon. With a significant market share in TV and streaming advertising, the merged company would also have the power to influence pricing in the industry.
In conclusion, the approval of the RIL-Disney merger by the Competition Commission marks a significant development in the Indian media and entertainment sector. The voluntary modifications required by the Commission indicate a commitment to ensuring fair competition in the market. As the deal progresses towards finalization, all eyes will be on how this merger will impact the industry and the choices available to consumers in India.