Indian regulator approves merger of Disney and Reliance Entertainment

The Competition Commission of India has approved the proposed merger between Reliance Industries Limited (RIL) and The Walt Disney Company's key entertainment businesses (TWDC) in India, subject to voluntary modifications.

The deal, announced in February, will combine the entertainment businesses of Viacom18, part of billionaire Mukesh Ambani's RIL group, with Star India Private Limited (SIPL), a wholly owned Disney subsidiary. Following the transaction, SIPL will become a joint venture between RIL, Viacom18 and existing TWDC subsidiaries.

RIL, a diversified conglomerate founded by billionaire Mukesh Ambani, is bringing its media and entertainment portfolio. Viacom18's assets include television broadcasting, streaming platform JioCinema, advertising sales, merchandising, and film production and distribution.

SIPL is bringing its TV broadcasting arm, content production capabilities, streaming platform Disney+ Hotstar and its advertising business into the merger. Star Television Productions Limited (STPL), a Disney company based in the British Virgin Islands, is also part of the deal.

The Competition Commission has not publicly explained the terms of the changes it is seeking, saying a detailed order for approval will be issued shortly. It only last week raised initial concerns about the enlarged group's potential dominance of cricket rights. Disney and RIL were rivals in the last round of bidding for multi-year rights packages for the popular IPL tournament, pushing the deal's value up to around $6 billion. Cricket is India's most popular sport and has been a key driver of new customer acquisition.

The proposed RIL-Disney deal has already received the green light from the National Company Law Tribunal (in May). This NCLT clearance allows the companies to hold a shareholders meeting on the matter and requires 75% of the participating shareholders to vote in favour of the deal for it to go through.

This merger will reshape the Indian media landscape, bringing together two major players in the market. The combined company would have 120 TV channels and two streaming services, enabling it to compete with major players such as Sony, Zee Entertainment, Netflix and Amazon. It would also have a huge position in TV and streaming advertising – news agency Reuters puts it at 40% market share – and would therefore be able to dictate pricing.