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.)

New Delhi:

India’s antitrust body has asked Reliance Industries and Walt Disney around 100 questions linked to their $8.5 billion India media assets merger, including details on sports rights as it heightens its scrutiny of the deal, two sources told Reuters.

Antitrust experts had warned that the Reliance and Disney deal, which was announced in February, could face intense scrutiny as it will create India’s biggest entertainment player with 120 TV channels and two streaming services.

The companies will also together own lucrative rights for cricket, India’s most popular sport.

In a confidential submission to the Competition Commission of India (CCI) in May, the companies said their merger would not hurt the competition, and argued that cricket rights will expire in 2027 and 2028 and allow bidding by rivals, and advertisers can target cricket-watching consumers on many rival platforms including YouTube, Reuters reported in May.

The CCI has now sought more details via two sets of questions, including why YouTube – which mostly has free, user-generated content – should be treated in the same market as subscription streaming services like Netflix and Disney, two sources familiar with the matter said.

Reliance and Disney have responded to the CCI questions and argued YouTube too has its own licensed, paid content as well as a wide reach, said the sources, who declined to be named as the information is confidential.

Data from Media Partners Asia last year showed that YouTube accounted for 88% of the online video market in India, while the premium video market of 12% is dominated by streaming services which “curate premium long-form content”.

Reliance-Disney will also own digital and TV cricket rights worth billions of dollars for top cricket tournaments as well as for the Wimbledon tennis championship, which has raised more antitrust concerns.

The CCI has also asked the companies for details on which entity owns which sports rights and for how long, as well as information on who had bid for them previously.

“The CCI is so far not raising concerns on the rights but is gathering information,” said one of the sources.

The requests for so much information could be because of the large size of the deal, said the first source. The second source, however, said the CCI was asking an unusually large number of questions.

Reliance, which is led by billionaire Mukesh Ambani, and the CCI did not respond to Reuters requests for comment. Disney declined to comment. The CCI is still reviewing the merger.

If it closes, the Reliance-Disney deal will reshape India’s $28 billion entertainment market where Zee Entertainment and Sony also operate.

Jefferies estimates Disney-Reliance will command 40% of the advertising market share in the TV and streaming segments.

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

Walt Disney CEO Bob Iger said the merger would create a big entity and help it to stay in the market at a “significant level”. File
| Photo Credit: AP

Walt Disney CEO Bob Iger has said a joint venture with Reliance Industries after merging its India business would benefit the company in terms of profit and also “derisk” its business in the Indian market.

The merger deal will create a big entity and help it to stay in the market at a “significant level”, said Iger at a Morgan Stanley investor conference earlier this week.

“We had an opportunity to align with Reliance, which is obviously the company that has done very well there and one that we respect. And in doing so, end up owning part of a bigger media company. And we believe that, that not only should benefit us in terms of the bottom-line, but derisk us as well there,” he said.

Last month, Walt Disney Co. and Reliance Industries announced the signing of binding pacts to merge their media operations in India.

Under the deal, Reliance and its affiliates will hold 63.16% and Disney will have 36.84% in the JV, which will create India’s leading media company that will house two streaming services and around 120 television channels.

“We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox. We are one of the biggest media companies in India. But even though it is the most populous country in the world, we felt we want to be there because of that, we also know that there are challenges in that market,” he said.

Mr. Iger said, the merger will create a big entity and help it to stay in the market at a “significant level”.

“So, it’s kind of the best of both worlds. We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so,” he added.

The transaction values the joint venture at ₹70,352 crore ($8.5 billion) on a post-money basis, excluding synergies.

Billionaire Mukesh Ambani-led Reliance has also agreed to invest at closing ₹11,500 crore into the joint venture to give it the muscle to fight rivals such as Japan’s Sony, and Netflix.

Its OTT platform Disney + Hotstar has seen its paid subscriber base decline from around 55 million to 40 million in the first quarter of FY24 because of Reliance’s Jio Cinema winning exclusive rights for live sports. The combined entity will have the largest OTT subscriber base.

Disney + Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of $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 its 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 $720 billion, 12.92% higher than what Star India had paid on an average per match value.

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, bookmyshow and publishes magazines.

NW18 owns 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 and Reliance logos are seen in this file illustration.
| Photo Credit: Reuters

Reliance Industries Ltd. (RIL), Viacom 18 Media Private Ltd. (which is majority-owned by RIL’s entity TV18 Broadcast), and The Walt Disney Company (Disney) have signed binding definitive agreements to form a joint venture (JV) which will combine the businesses of Viacom18 and Star India in India.

Towards this Viacom18 will be merged into Star India Private Ltd. through a court-approved scheme of arrangement. Besides this RIL will invest at closing ₹11,500 crore into the JV for its growth strategy.

“The transaction values the JV at ₹70,352 crore on a post-money basis, excluding synergies. After completion of the above steps, the JV will be controlled by RIL and owned 16.34% by RIL, 46.82% by Viacom18 and 36.84% by Disney,” the entities said in a joint statement.

Subject to regulatory and third-party approvals, Disney may also contribute certain additional media assets to the JV.

Nita Mukesh Ambani will be the chairperson of the JV and Uday Shankar, the former President of Walt Disney Asia Pacific, will be Vice Chairperson providing strategic guidance to the JV.

The transaction is expected to be completed in the last quarter of calendar year 2024 or first quarter of calendar year 2025.

The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together media assets across entertainment (Colors, StarPlus, StarGOLD) and sports (Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar, the companies said.

The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world, they said.

Mukesh D Ambani, CMD RIL said, “This is a landmark agreement that heralds a new era in the Indian entertainment industry.”

Bob Iger, CEO of The Walt Disney Company, said, “India is the world’s most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company.”

Uday Shankar, Co-founder, Bodhi Tree Systems, said, “We are privileged to be enhancing our relationship with Reliance to now also include Disney, a global leader in media & entertainment.”