We are very accustomed to waiting for mergers. Thanks to the proposed merger of Sony and Zee, we waited for more than 2 years and all for nothing.
The merger between Mukesh Ambani’s Reliance Industry Limited Viacom18 and Walt Disney’s Star India might take more time to finalize, even though it received approval from the National Company Law Tribunal (NCLT) last month. This delay is because the Competition Commission of India (CCI) will conduct a detailed investigation into the merger’s potential impact on the market. Regular readers at Binged are well aware that Reliance and Disney Star have signed a merger deal but it is yet to result in any actual change.
Both companies have submitted Form 2 to the CCI, which is a notification form for mergers, acquisitions, or amalgamations that could significantly affect competition. This form is used when a merger might have a major impact on the competitive landscape in a particular industry.
The CCI will review the information provided in Form 2 to determine whether the merger will negatively affect competition. On February 28, 2024, Star India signed a binding agreement with RIL and Viacom18 to form a joint venture. This joint venture will combine the businesses of Viacom18 and Star India, including entertainment and sports pay TV, free-to-air networks, direct-to-consumer (DTC) services, library content, and some production businesses.
The value of this joint venture is estimated at ₹70,352 crore. RIL will control the joint venture, owning 16.34% of it, Viacom18 will own 46.82%, and Disney will own 36.84%. Disney might also add more media assets to the joint venture, pending regulatory and third-party approvals.
In summary, while the merger has received initial approval, it still requires a thorough investigation by the CCI to ensure it doesn’t harm competition. We will keep you posted on whatever step this merger goes through.
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