Reliance Industries gets go-ahead for $8.5 billion merger with Disney

India's competition watchdog, the Competition Commission of India (CCI), has given the green light to the merger between Reliance Industries Ltd (RIL) and Disney's Indian media assets, pending certain voluntary modifications proposed by both parties. The merger is anticipated to finalise either by the end of 2024 or in the early months of 2025.

In an announcement shared on X (formerly known as Twitter), the CCI stated, "The Commission approves the proposed combination involving Reliance Industries Ltd, Viacom18 Media Pvt Ltd, Digital18 Media Ltd, Star India Pvt Ltd, and Star Television Productions Ltd, subject to the compliance of voluntary modifications."

C-2024/05/1155 Commission approves 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 the compliance of voluntary modifications. pic.twitter.com/S2JVzw2VgR

— CCI (@CCI_India) August 28, 2024

Back in February, Viacom18, a subsidiary of RIL, and Star India, Disney's Indian arm, revealed their plan to merge, aiming to form one of India's most influential TV and digital streaming platforms. This approval from the CCI arrives just before RIL’s 47th annual general meeting, marking a significant step forward for the conglomerate.

The CCI has been scrutinising this deal closely, particularly because of potential concerns regarding monopolistic control over cricket broadcasting rights, digital streaming, and the potential influence over digital advertising rates during high-demand periods.

To address these issues, the merger terms include a court-sanctioned arrangement where Viacom18's media operations will integrate with Star India Pvt Ltd (SIPL). According to a statement released by RIL in May, the company did not expect this transaction to negatively impact competition within India.

The newly formed joint venture is valued at INR 70,350 crore (approximately $8.5 billion). Reliance and its affiliated entities will maintain control, holding a substantial 63.16% stake in the newly merged company. The ownership breakdown will see RIL with 16.34%, Viacom18 controlling 46.82%, and Disney retaining a 36.84% stake.

In a move to further expand its over-the-top (OTT) streaming capabilities, RIL has committed an additional INR 11,500 crore ($1.3 billion) investment into the joint venture.

The governing board of the merged entity will feature ten members: five nominated by RIL, three by Disney, and two independent directors. Nita Ambani will serve as chairperson, with Uday Shankar, a former Walt Disney executive, taking on the role of vice chairperson. With a portfolio of 120 television channels and two streaming platforms, this combined Reliance-Disney venture is likely to give major broadcasters and streaming players like Sony, Netflix, and Amazon a tough time.