UPDATED: India‘s National Company Law Tribunal (NCLT) Mumbai Bench approved the high-profile merger between Reliance Industries Limited’s (RIL) media arm and Disney‘s Indian entertainment assets on Friday. This follows the approval – that may be subject to so-far unspecified conditions – by the Competition Commission of India on Wednesday.
The NCLT order states that the merger was approved by shareholders and creditors of the involved companies and that regulatory bodies, including the ministry of corporate affairs and the income tax department, raised no objections after clarifications.
Also noted by the NCLT is that while no prior approval is required from the ministry of information and broadcasting for the scheme itself, the petitioner companies will need to seek approval from the ministry for the transfer of TV channels from RIL’s Viacom18 to Disney’s Star India. The companies have undertaken to obtain this approval.
The NCLT said that the scheme “appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.”
The companies now have 30 days to file the NCLT order with the Registrar of Companies.
On Thursday, RIL chair Mukesh Ambani welcomed Disney to the Reliance family during the company’s annual general meeting.
PREVIOUSLY: India’s Competition Commission has approved the proposed merger between Reliance Industries Limited (RIL) and key entertainment assets of The Walt Disney Company (TWDC) in India, subject to voluntary modifications.
Announced in February, the deal will combine the entertainment businesses of Viacom18, part of billionaire Mukesh Ambani’s RIL group, with Star India Private Limited (SIPL), a wholly owned Disney subsidiary. Post-transaction, SIPL will become a joint venture held by RIL, Viacom18 and existing TWDC subsidiaries.
RIL, a diversified conglomerate created by billionaire Mukesh Ambani, brings its media and entertainment portfolio to the table. Viacom18’s assets include TV broadcasting, streaming platform JioCinema, advertising sales, merchandising and film production and distribution.
SIPL contributes its TV broadcasting arm, content production capabilities, streaming platform Disney+ Hotstar, and advertising business to the merger. Star Television Productions Limited (STPL), a British Virgin Islands-based Disney entity, is also part of the deal.
The Competition Commission has not publicly explained the terms of the modifications it is seeking and says that a detailed order on the approval is forthcoming. As recently as last week it voiced initial concerns over the enlarged group’s potential for dominance in the cricket rights. Disney and RIL were rivals in the last round of bidding for multi-year packages of rights to the popular IPL tournament and bid up the value of the deal to some $6 billion. Cricket is India’s most cherished sport and has been a major driver of customer acquisitions. RIL and Disney have a near stranglehold on cricket rights in India between them.
The proposed RIL-Disney deal has already secured a green light (in May) from the National Company Law Tribunal. That NCLT clearance allows the companies to hold a shareholder meeting on the matter and requires 75% of participating shareholders to vote in favor for the deal to go through.
This merger is set to reshape the Indian media landscape, combining two major players in the market. The merged company would boast 120 TV channels and two streaming services, positioning it to compete with major players like Sony, Zee Entertainment, Netflix and Amazon. It would also have a huge position in TV and streaming advertising — the Reuters news agency suggests 40% market share — and therefore the ability to determine pricing.
