Billionaire Mukesh Ambani-promoted Reliance Industries has approached the Competition Commission of India (CCI), the fair trade regulator, for a merger of Viacom18 and Star India Pvt Ltd (SIPL) for $8.5 billion.
“The proposed transaction seeks to merge the entertainment business (along with certain other identified businesses) of Viacom18, part of the Reliance Industries Ltd (RIL) group and SIPL, a wholly owned subsidiary of The Walt Disney Company (TWDC).
“Following the transaction, SIPL, currently a wholly owned entity of TWDC through its subsidiaries, will become a joint venture (JV) jointly owned by RIL, Viacom18 and existing subsidiaries of TWDC,” the CCI said on Friday.
As RIL said in the notice, the proposed transaction will not have a material adverse effect on competition in India.
However, to facilitate the CCI’s assessment, several key markets were identified where horizontal overlap was significant, such as the licensing of audiovisual content rights, the distribution of broadcast television channels, the provision of audiovisual (AV) content and the provision of advertising space in India.
SIPL is engaged in a range of media activities, including television broadcasting, film production and OTT platform operation. It is a wholly owned entity of the American company The Walt Disney Company (TWDC).
Viacom18 is engaged in the business of broadcasting television (TV) channels and operating an over-the-top (OTT) platform in India and globally. It is also involved in the production and distribution of cinema films.
In February this year, global media giant Walt Disney Co and Reliance Industries announced binding pacts to merge their media operations in India to create a Rs 70,000-crore ($8.5 billion) behemoth.
Upon successful completion of the transaction, it would be India’s largest media and entertainment company with over 100 channels in several languages, two leading OTT platforms and a 750 million viewer base across the country.
Nita Ambani, wife of Reliance Industries Chairman Mukesh Ambani, will chair the joint venture and Uday Shankar will be vice-chairman.
Reliance and its affiliates will hold 63.16% stake in the combined entity, while Disney will hold the remaining 36.84% stake. Reliance has also agreed to invest around ₹ 11,500 crore in a joint venture to grow its OTT business.
