NCLT Approves Reliance Industries & Star India Merger
The National Company Law Tribunal (NCLT) recently gave the green light for the merger of Viacom 18 Media, owned by Reliance Industries, with Star India. This significant move was approved by a two-member bench of the NCLT, marking a crucial development in the media and entertainment landscape. The merger, encompassing Viacom 18, Digital18, and Star India, is a part of a larger scheme designed to consolidate the media assets of these entities.
Competition Commission of India’s Approval
Just two days prior to NCLT’s decision, the Competition Commission of India had granted approval for the merger of media assets belonging to Reliance Industries and The Walt Disney Co. This approval sets the stage for the creation of India’s largest media conglomerate valued at over Rs 70,000 crore. The NCLT, in its approval, noted that the scheme was fair, reasonable, compliant with the law, and aligned with public policy.
Key Observations from NCLT
In a comprehensive 22-page ruling, the NCLT emphasized that the scheme’s effectiveness was contingent upon obtaining the Competition Commission of India’s approval. The proposed scheme outlined the transfer and vesting of Media Operations Undertaking from Viacom 18 and JioCinema to Digital 18, a subsidiary of Viacom 18. Following this initial transfer, a subsequent demerger, transfer, and vesting process would take place with V18 Undertaking moving to Star India.
Mukesh Ambani’s Vision for the Merger
Mukesh Ambani, the Chairman of Reliance Industries, expressed his enthusiasm for the mega-merger, citing it as the dawn of a new era in India’s entertainment industry. He welcomed The Walt Disney Company into the Reliance fold, positioning the expanded media business alongside Jio and the retail division as a pivotal growth engine within the Reliance ecosystem. Despite facing scrutiny from antitrust regulators, the deal received approval from both the CCI and NCLT.
Financial and Structural Composition
Under the finalized deal, Reliance Industries and its affiliates will hold a controlling stake of 63.16% in the combined entity, which will house two streaming services and a vast array of 120 television channels. The remaining 36.84% will be owned by Walt Disney, solidifying the position of the joint entity as India’s largest media house. To bolster its competitive edge against rivals like Sony and Netflix, Reliance Industries committed to a substantial investment of close to Rs 11,500 crore into the joint venture.
Leadership and Future Prospects
In terms of leadership, Nita Ambani, the wife of Mukesh Ambani, will spearhead the joint venture, underscoring the family’s deep involvement in shaping the conglomerate’s strategic direction. Additionally, Uday Shankar has been appointed as the Vice Chairperson, bringing his expertise and industry knowledge to drive future growth and innovation within the media landscape.
In conclusion, the merger between Reliance Industries-owned Viacom 18 Media and Star India signifies a pivotal moment in the evolution of India’s media and entertainment industry. With regulatory approvals in place and a strategic vision outlined, the joint entity is poised to redefine the sector’s landscape and emerge as a dominant force in the market.
Please visit NCLT Official Website and CCI Official Website for further information.