CCI approves Viacom18-Star India merger
The green light from the CCI comes with a caveat: the companies must comply with certain voluntary modifications to address potential competition concerns
In a significant boost to the Indian media landscape, the Competition Commission of India (CCI) has approved the proposed merger involving Reliance Industries Limited (RIL), Viacom18 Media Private Limited, Digital18 Media Limited, Star India Private Limited (SIPL), and Star Television Productions Limited.
C-2024/05/1155 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. pic.twitter.com/S2JVzw2VgR
— CCI (@CCI_India) August 28, 2024
The green light from the CCI comes with a caveat: the companies must comply with certain voluntary modifications to address potential competition concerns. While the exact details of these modifications remain undisclosed, it is likely that the CCI has sought to ensure a level playing field in the Indian media market.
CCI has shared its statement regarding the clearance:
The proposed combination envisages to combine the entertainment businesses (along with certain other identified businesses) of Viacom18, part of RIL group and SIPL, wholly owned by The Walt Disney Company (TWDC). As a result of the transaction, SIPL, currently a wholly owned entity of TWDC through its subsidiaries, shall become a joint venture (JV) which will be jointly held by RIL, Viacom18 and existing TWDC subsidiaries.
RIL, either directly or indirectly, is engaged in several businesses such as exploration and production of oil and gas; petroleum refining and marketing; manufacture and sale of petrochemicals; manufacture and sale of chemicals; organised retail; media and entertainment activities; and telecommunication and digital services in India and worldwide.
Viacom18 is, inter alia, engaged in the business of broadcasting of television (TV) channels, operation of an OTT platform, selling commercial advertisement space on TV channels, licensing of merchandise, and organization of live events in India and worldwide.
Viacom18 is also engaged in the business of production and distribution of motion pictures. SIPL is engaged in a range of media activities including TV broadcasting and the production of AV content and motion pictures, operation of an OTT platform, and selling commercial advertisement space on TV channels and OTT platforms.
SIPL is, directly or indirectly, a wholly owned entity of TWDC. STPL is a company incorporated in the British Virgin Islands and owned, indirectly, by TWDC. The Commission approved the proposed combination subject to the compliance of voluntary modifications.
Detailed order of the Commission will follow.
The merger between the two media powerhouses was pending clearance from the anti-trust regulator to ensure that a proposed merger or acquisition does not create an unfair monopoly or reduce competition in the market.
CCI raised preliminary concerns that the $8.5 billion merger between Reliance's and Walt Disney's media assets could harm competition, especially due to their combined control over cricket broadcasting rights.
On February 28, 2024, Star India entered into a binding definitive agreement with RIL and Viacom 18 Media Private Limited, which is majority owned and controlled by RIL, to form a joint venture that will combine the businesses of Viacom18 and Star India consisting of entertainment and sports pay TV and free-to-air networks, DTC services, library content and certain production businesses (the Star India Transaction).
The transaction values the JV at ₹70,352 crore (US$ 8.5 billion) on a post-money basis, excluding synergies. Post 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. Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals.
