Reliance-Disney tie-up: CCI grants approval for $8.5-billion mega asset merger; Key details

Reliance-Disney merger: The Competition Commission of India (CCI) on Tuesday released a 48-page order that grants approval for the merger of media assets between Reliance Industries and Walt Disney.

The approval comes with a set of conditions to be met, including the divestment of seven TV channels.

To secure the regulator's approval, the involved parties have willingly agreed not to combine TV advertising slots for IPL, ICC, and BCCI cricketing rights until the current rights expire. Additionally, they will be required to sell off seven TV channels, including Hungama and Super Hungama.

As part of the conditions outlined, the companies have also agreed not to package the sale of TV advertising slots for all three cricketing rights - IPL, ICC, and BCCI - for the duration of the existing rights.

Key Details:

1. Reliance and Disney have voluntarily agreed that they will not bundle TV ad slots for IPL, ICC and BCCI cricketing rights till the end of existing rights.

2. The parties will sell seven TV channels, including Hungama and Super Hungama.

3. Reliance and Disney have voluntarily agreed that they will not bundle together the TV ad slot sales for all three cricketing rights available with them -- IPL, ICC and BCCI -- for the remaining tenure of the existing rights.

"The parties (Reliance and Disney) will not bundle together OTT ad slot sales for all three cricketing rights available with the parties i.e. IPL, ICC and BCCI for the balance tenure of the existing rights," the 48-page order said.

4. The parties have committed not to raise advertisement rates to an unjustifiable extent on their TV and streaming platforms for the ICC and IPL events while they retain the current rights.

5. The merger received approval in August, following a three-month filing period, allowed the establishment of the largest media and entertainment company in the country. The Competition Commission of India (CCI) stipulated that the approval is contingent upon adherence to voluntary modifications to the merger plan. 

6. Under the agreement, Reliance Industries Limited (RIL) will have a controlling interest in the newly formed entity, holding a 56% stake. Disney will possess 37% ownership in the merged company, while Bodhi Tree Systems will retain a 7% stake. 

7. The combined entity is estimated to be valued at Rs 70,352 crore and will have a significant presence in both television and streaming markets.

8. Star India has been valued at Rs 26,000 crore, while Viacom18's valuation stands at Rs 33,000 crore. Interestingly, Disney+ Hotstar and JioCinema have surpassed the valuations of Star and Viacom18's linear TV businesses.

9. RIL plans to inject Rs 11,500 crore into the merged entity, demonstrating its commitment to the media and entertainment sector. This brings RIL's total investment in the industry to over Rs 22,000 crore, reaffirming its position as a key player in the market.

10. Back in April 2023, RIL had already infused Rs 10,839 crore into Viacom18 as part of a larger Rs 15,145-crore investment. Notably, this investment also saw Uday Shankar and James Murdoch's Bodhi Tree Systems contributing Rs 4,306 crore, highlighting the confidence of industry leaders in the future prospects of the media and entertainment sector.

11. Nita Ambani and Uday Shankar have been designated as the chairperson and vice chairperson, respectively, of the merged entity.