NCLT green lights Reliance-Disney merger

A day after the Competition Commission of India granted conditional approval for the merger between Walt Disney’s Star India and Reliance Industries’ Viacom18 Private Ltd, the National Company Law Tribunal (NCLT) approved the proposed $8.5 billion deal on Friday. This merger will create a major player in India’s entertainment sector by combining Disney Hotstar and Jio Cinema into a single entity.

The NCLT’s approval is contingent upon the companies obtaining permission from the Ministry of Information and Broadcasting for the transfer of TV channels from Viacom18 to Star India. Additionally, the companies must file the order and the approved scheme with the Registrar of Companies within 30 days and present the order to the Superintendent of Stamps for stamp duty adjudication, if applicable, within 60 days.

Should the companies address the regulatory concerns and make necessary modifications to the deal structure as agreed with the CCI and NCLT, the merger is anticipated to be finalised by the end of this year or early next year.

The merger will integrate entertainment and sports channels, along with Network18’s TV18 news and other channels under the 'Colors' brand, positioning the new entity as the largest media group in India. It will compete with players like Sony, Netflix, and Amazon.

The board of the new entity will consist of 10 members - five from Reliance Industries, three from Disney, and two independent directors. Nita Ambani will serve as chairperson, and former Walt Disney executive Uday Shankar will be the vice chairperson.

In terms of ownership, Reliance Industries will hold a 16.34% stake, Viacom18 will have 46.82%, and Disney will hold 36.84%. Despite this distribution, Reliance Industries will retain control of the merged entity.