Competition watchdog CCI approves Disney, RIL-owned Viacom18’s $8.5-bn merger

MUMBAI/NEW DELHI: The Competition Commission of India (CCI) on Wednesday approved the proposed merger between Disney Star, the local unit of The Walt Disney Company, and Reliance Industries-controlled Viacom18, with some voluntary modifications.

This approval, the most crucial for a merger of this size, will pave the way for the largest deal in India's media and entertainment sector, creating an $8.5-billion entertainment network.

“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,” CCI said in a post on X (formerly Twitter) on Wednesday.

The CCI, however, did not reveal the voluntary modifications proposed by the two parties in the original merger agreement.

According to the agreement signed on 28 February, Viacom18’s media operations will merge with Star India Pvt Ltd (SIPL) through a court-approved scheme of arrangement. The joint venture, valued at ₹70,350 crore on a post-money basis, will see Reliance Industries injecting ₹11,500 crore ($1.4 billion) to support the combined entity's growth strategy. Subsequently, Reliance and its associates will own nearly 56% of the merged entity, Disney will hold 36.84%, and the remaining 7.5% will belong to Bodhi Tree, a joint venture between James Murdoch and former Star India CEO Uday Shankar.

Read more: Zee, Sony bury the hatchet, part ways amicably

Mint first reported on 29 February that Star India has genre-leading channels in Hindi, Marathi, Malayalam, Bengali, and Kannada markets. With the merger, the combined market share of the two entities would exceed 40%, with some markets seeing complete dominance and reduced competition, prompting the CCI to scrutinise this aspect closely.

Both Reliance and Disney were confident of securing CCI’s approval, given that the competition watchdog had conditionally approved the now-cancelled Zee and Sony merger after directing Zee to divest certain channels.

"The CCI approval is crucial for mergers that breach prescribed assets and turnover thresholds. Mergers involving high market shares are generally reviewed closely by the CCI. Media reports suggested the combined entity would capture 50% of certain markets, alongside concerns about sports rights. The CCI likely reviewed these issues and issued a notice questioning why divestment should not occur. Typically, merging parties propose voluntary modifications, allowing the CCI to clear the merger. In this case, while the specific modifications are not disclosed, they could involve selling off channels or relinquishing some cricket rights," said Akshat Kulshrestha, partner at law firm S&R Associates, who specialises in CCI and antitrust laws.

The Way Forward

With CCI’s approval in place, the biggest hurdle is cleared, and the companies can soon initiate the integration process, said two people with direct knowledge of the proceedings, requesting not to be named.

The first person said that Reliance expects to secure the remaining approvals from the National Company Law Tribunal (NCLT) and the ministry of information & broadcasting (MIB) by 15 September, with the integration phase starting before October.

“It is just a matter of days now,” he said. “The NCLT and I&B ministry approvals are largely procedural. There are no objections from lenders or creditors. Since the companies are private, there is no need for approval from the market regulator. Integration should begin by October.”

Read more: Star's mega-bet on cricket went awry. Now it wants to rework the deal

The second person said that during the integration phase, the companies will announce the organizational structure of key managerial personnel (KMP). The leadership team will assess each business and determine the requirements.

“The list of KMPs is already prepared and will be announced once all approvals are in. There will be no delay, and the entire integration should not take more than a couple of months,” the person said.

While neither source confirmed how many positions would be eliminated post-merger, media experts estimate that at least 1,000 employees may need to find new jobs due to duplication across functions.

This information could not be independently verified.

Both Viacom18 and Disney Star did not respond to Mint’s requests for comments.

Post-Merger Outlook

Nita M. Ambani will head the combined venture as chairperson, while Shankar will serve as vice-chairperson.

The joint venture will combine media assets across entertainment (TV channels such as Colors, Star Plus, Star Gold) and sports (Star Sports and Sports18), along with content streaming on over-the-top platforms JioCinema and Hotstar, reaching more than 750 million viewers across India. It will also gain exclusive rights to distribute Disney films and productions in India, with a licence to use over 30,000 Disney content assets.

The merged entity will have approximately 100 TV channels, with 70 under Disney and the rest under Viacom18. The combined resources and content libraries of Disney and Reliance could impact traditional TV networks, especially if the deal shifts advertising revenue and viewer preferences, according to media experts.

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The deal gives Reliance access to Disney’s extensive English-language libraries, including its Marvel and Lucasfilm catalogues. Reliance already has content from Warner Bros. Discovery, including acclaimed HBO Originals, and is bullish on regional languages, including the four South Indian languages, Marathi, and Bengali.

Sports will remain a priority for the entity, leaving little room for others in this space.