A merger between Disney and Reliance has been approved by Indian regulators creating a major player in the media market. The Indian Competition Commission approved a merger between Reliance Industries Limited and some specific entertainment assets of The Walt Disney Company in India, subject to voluntary modifications. The news comes after there was concern that this wouldn’t happen due to regulatory and monopoly concerns regarding cricket rights.
The deal was initially announced in February. It will see Viacom18, part of Mukesh Ambani’s Reliance Industries Limited group, and Star India Private Limited, a wholly-owned Disney subsidiary. When the merger is complete, the joint venture will be held by RIL, Viacom18, and other Disney subsidiaries.
At this point, the Competition Commission hasn’t explained the terms of the modifications it is seeking. A detailed order for the approval will be coming soon. The joint venture comes after Disney and Reliance were competitors in bidding for cricket rights. Cricket is the most popular sport in India and a major driver for subscribers. Between Disney and Reliance, almost all cricket rights in India are held.
This new deal already had secured approval in May from the National Company Law Tribunal. This clearance allowed both companies to hold a shareholder meeting on the matter. It requires 75% shareholder approval for the deal to be approved.
This venture will reshape the Indian media landscape if it does get completed. It will combine the two biggest players in this market. The newly merged company will have approximately 120 TV channels and also two streaming services. This will give the venture the strength to compete with other major players like Sony, Zee Entertainment, Netflix, and Amazon. This would also give it a strong position in TV and streaming advertising. Reuters estimates that this would be approximately a 40% market share, which would give it the ability to determine pricing.
The merger between Disney and Reliance is set to close in October.
