A company tribunal has approved the $8.5 billion merger of Reliance Industries and Disney’s Indian media assets, Reliance said on Friday.

Earlier this week, the companies had won approval from the Competition Commission of India (CCI) for the deal, after assuaging regulatory worries about their grip on broadcasting rights for cricket.

The competition regulator had said the deal, which will create the country’s biggest entertainment player, was being approved subject to modifications submitted voluntarily by the companies, without sharing further details. A detailed order is yet to be issued.

To get the merger over the line, the two companies have offered concessions, including a commitment to not raise advertising rates unreasonably for streamed cricket matches, and to sell 7-8 non-sports TV channels, a source familiar with the matter had told Reuters.

On Thursday, at Reliance’s annual shareholders meeting, billionaire-chairman Mukesh Ambani had welcomed the merger and said, “our expanded Media business will be an invaluable growth centre in the Reliance ecosystem”.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

The Competition Commission of India on Wednesday approved the merger of the media assets of Reliance Industries and Walt Disney Co to create the country’s largest media empire worth over Rs 70,000 crore.

The deal, announced six months ago, faced scrutiny by the anti-trust regulator and the approval has come after the parties proposed certain modifications to the original transaction structure.

In a post on X, the regulator said it has cleared 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”.

The Competition Commission of India (CCI), however, did not disclose voluntary modifications in the original deal made by the two parties.

Under the deal, Mukesh Ambani-led Reliance Industries and its affiliates will hold 63.16 per cent of the combined entity that will house two streaming services and 120 television channels.

Walt Disney will hold the remaining 36.84 per cent stake in the combined entity, which will also be India’s largest media house.

Reliance Industries has also agreed to invest close to Rs 11,500 crore into the joint venture to give it the muscle to fight rivals like Japan’s Sony and Netflix.

Nita Ambani, wife of billionaire and Reliance chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be the vice chairperson.

Mr Shankar is a former top Disney executive and has a joint venture with James Murdoch called Bodhi Tree.

CCI had raised various queries related to the deal, particularly with respect to the proposed combined entity’s cricket broadcasting rights and OTT presence amid anti-competitive concerns.

As per regulations, CCI has to pass a prima facie order within 30 calendar days of the merger being notified to the regulator. However, it has the power to conduct an in-depth inquiry to ascertain possible anti-competitive issues, and in that case, there will be a wider public consultation.

Merger activities in the fast-growing and highly competitive media and entertainment space are slowly gaining pace amid a consolidation trend to stay financially healthy.

Earlier this year, the much-hyped merger involving Sony and Zee failed due to multiple issues, and on Tuesday, the two companies announced that the dispute between them had been settled amicably.

Media ventures of Reliance are currently housed in Network 18, which owns TV18 news channels as well as a plethora of entertainment (under the ‘Colors’ brand) and sports channels. NW18 also has stakes in moneycontrol.com, and bookmyshow and publishes magazines.

Its subsidiary NW18 owns the news channels CNBC/CNNNews.

Reliance separately owns a movie production arm – JioStudios, and majority stakes in two listed cable distribution companies Den and Hathway.

Disney + Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of USD 71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and cinema channels, such as StarPlus and StarGold as well as sports channels like Star Sports.

While Disney + Hotstar rapidly increased their subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in the 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent higher than what Star India had paid on an average per match value

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Antitrust body, the Competition Commission of India, has reached an initial assessment that the $8.5 billion India merger of Reliance and Walt Disney media assets harms competition due to their power over cricket broadcast rights, four sources told Reuters on Tuesday.

In the biggest setback so far to their planned merger, the Competition Commission of India (CCI) has privately told Disney and Reliance its view and asked the companies to explain why an investigation should not be ordered, one of the sources said.

“Cricket is the biggest pain point for the CCI,” said one of the sources.

The merged company, which would be majority-owned by Mukesh Ambani’s Reliance, would have lucrative rights worth billions of dollars for the broadcast of cricket, raising fears over pricing power and its grip over advertisers.

Reliance, Disney and the CCI did not immediately respond to requests for comment. All sources declined to be named as the CCI process is confidential.

Antitrust experts had warned the merger, announced in February, could face intense scrutiny as it will create India’s biggest entertainment player which will compete with Sony, Zee Entertainment, Netflix and Amazon with a combined 120 TV channels and two streaming services.

The CCI earlier privately asked Reliance and Disney around 100 questions related to the merger. The companies have told the watchdog they are willing to sell fewer than 10 television channels to assuage concerns about market power and win early approval, sources told Reuters.

But they had refused to relent on cricket, telling the CCI that broadcast and streaming rights will expire in 2027 and 2028 and cannot be sold right now, and that any such move would require the cricket board’s approval, which could delay the process.

The CCI notice may delay the approval process but the companies can still address the concerns by offering more concessions, a second source said.

“This is a precursor of things getting complicated…The notice means that initially, the CCI thinks the merger harms competition and whatever concessions offered are not enough,” added the person.

A third source said CCI has given the companies 30 days to respond and explain their position, and the concerns currently revolve around how advertisers could face pricing challenges if the entities are merged.

“The CCI is concerned the entity can increase rates for advertisers during live events,” said the third person.

Jefferies has said the Disney-Reliance entity will have a 40% share of the advertising market in TV and streaming segments.

Cricket has a fanatical following in India and matches are sought after by advertisers. Reliance-Disney will own digital and TV cricket rights for top leagues, including for the world’s most valuable cricket tournament, the Indian Premier League.

The former head of mergers at the CCI, K.K Sharma, has said the merger could lead to “almost an absolute control over cricket.”

Zee and Sony planned to create a $10 billion TV behemoth in India and in 2022 and got a similar warning notice.

They offered some concessions by selling three TV channels which helped them win a CCI approval, but the merger eventually collapsed.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)