Reliance Industries Ltd (RIL) owned Viacom18 and Walt Disney’s Star India have filed a combination notice with the Competition Commission of India (CCI) seeking approval for their merger deal, following the National Company Law Tribunal (NCLT) admitting their merger application.
In the May 24 notice, the parties assured CCI that the proposed transaction will not significantly impact competition in India and urged that precise market definitions be kept open.
“The proposed transaction will not cause any appreciable adverse effect on competition in India,” said the notice. “Accordingly, the exact relevant market definitions for evaluating the proposed transaction may be left open.”
On February 28, Star India and Viacom18 agreed to merge operations to form India’s largest media and entertainment business, valued at $8.5 billion. The merger will create a media giant with a combined topline of Rs 25,000 crore based on FY23 numbers.
The parties have stated that the anti-competition watchdog can assess horizontal overlaps in India’s audio-visual (AV) content, advertising space, AV content rights licensing, film production, broadband internet services, and broadcast TV channel distribution for ease of assessment.
They have identified vertical linkages in the proposed transaction in the upstream market for AV content rights licensing and advertising space supply, and the downstream market for provision of AV content and advertisers.
Apart from Star and Viacom18, other parties involved in the transaction are RIL and Star Television Productions, a subsidiary of Disney.
The proposed transaction aims to enhance operational efficiencies, besides offering Indian viewers an unparalleled entertainment experience, by providing a competitive and world-class digital platform as well as a competitive scaled-up advertising platform for small and medium Indian businesses.
Legal experts had earlier told ET that the Star-Viacom18 deal is likely to go through intense CCI scrutiny since the combine will dominate both the TV broadcasting and streaming markets in the country with over 100 TV channels and two streaming platforms — JioCinema and Disney+ Hotstar.
Star-Viacom18 will have a large presence in live sports, including properties such as the Indian Premier League, International Cricket Council (ICC) events, Indian, Australian and South African cricket board fixtures, Pro Kabaddi, the Indian Super League, and the English Premier League.
Recently, the Mumbai bench of the NCLT admitted the merger scheme of Viacom18 and its wholly-owned subsidiary Digital18 with Star India, marking the first step towards completion of the deal.
Viacom18 is set to transfer JioCinema and its media operations to Digital18 for Rs 24,186 crore and Rs 2,769 crore, respectively. Digital18 will then transfer Viacom18 assets to Star India and will receive shares in exchange.
Following the transfer, Star India’s shareholding will be divided among Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%). RIL plans to invest $1.4 billion in Star for a 16.34% stake.
