Disney-Reliance Entertainment merger approved by Indian regulator

UPDATED: India’s National Company Law Tribunal (NCLT) Mumbai Bench on Friday approved the high-profile merger between Reliance Industries Limited’s (RIL) media arm and Disney’s Indian entertainment assets. This follows the approval – which may be subject to as-yet unspecified conditions – by the Competition Commission of India on Wednesday.

The NCLT order states that the merger has been approved by the shareholders and creditors of the companies concerned and regulatory authorities, including the Ministry of Corporate Affairs and the Income Tax Department, have not raised any objections after clarification.

The NCLT also notes that while the scheme itself does not require prior approval from the Ministry of Information and Broadcasting, the proposing companies will have to seek approval from the ministry for transfer of TV channels from RIL’s Viacom18 to Disney’s Star India . The companies have committed to obtaining this approval.

The NCLT said the scheme “appears fair and reasonable, does not violate any provision 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 Chairman Mukesh Ambani welcomed Disney to the Reliance family at the company’s annual general meeting.

PREVIOUSLY: The Competition Commission of India has approved the proposed merger between Reliance Industries Limited (RIL) and major entertainment assets of The Walt Disney Company (TWDC) in India, subject to voluntary amendments.

The deal, announced in February, will combine the entertainment business of Viacom18, part of billionaire Mukesh Ambani’s RIL group, with Star India Private Limited (SIPL), a wholly owned subsidiary of Disney. Post the transaction, SIPL will become a joint venture of RIL, Viacom18 and existing TWDC subsidiaries.

RIL, a diversified conglomerate founded by billionaire Mukesh Ambani, is bringing 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 is contributing its TV broadcasting division, content production capabilities, streaming platform Disney+ Hotstar and advertising operations to the merger. 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 publicly explained the terms of the changes it is seeking and says a detailed order on approval is coming soon. Just last week, it raised initial concerns about the expanded group’s potential for dominance in cricket rights. Disney and RIL were rivals in the latest round of bidding for multi-year rights packages for the popular IPL tournament, raising the value of the deal to around $6 billion. Cricket is India’s most loved sport and has been a key driver of customer acquisition. RIL and Disney have a near stranglehold on cricket rights in India.

The proposed deal between RIL and Disney has already been given the green light by the National Company Law Tribunal (in May). That approval from the NCLT will allow the companies to hold a shareholders meeting on the issue and require 75% of participating shareholders to vote in favor for the deal to go ahead.

This merger will reshape the Indian media landscape and bring together two major players in the market. The merged company would have 120 TV channels and two streaming services, allowing it to compete with major players such as Sony, Zee Entertainment, Netflix and Amazon. It would also have a huge position in TV and streaming advertising – news agency Reuters suggests a 40% market share – and therefore the ability to set prices.