Competition Commission of India on Wednesday (August 28, 2024) said it has approved the merger of the media assets of Reliance Industries and Walt Disney Co to create the country's largest media empire.

The deal, announced six months ago, faced scrutiny by the anti-trust regulator and the approval has come after the parties proposed certain modifications to the original transaction structure.

In a post on X, the regulator said it has cleared the “proposed combination involving Reliance Industries Limited, Viacom18 Media Private Limited, Digital18 Media Limited, Star India Private Limited and Star Television Productions Limited, subject to the compliance of voluntary modifications”.

The Competition Commission of India (CCI), however, did not disclose voluntary modifications in the original deal made by the two parties.

Under the deal, Mukesh Ambani-led Reliance Industries and its affiliates will hold 63.16 per cent of the combined entity that will house two streaming services and 120 television channels.

Walt Disney will hold the remaining 36.84% stake in the combined entity, which will also be India’s largest media house.

Reliance Industries has also agreed to invest close to ₹11,500 crore into the joint venture to give it the muscle to fight rivals like Japan’s Sony and Netflix.

Nita Ambani, wife of billionaire and Reliance chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be the vice chairperson.

Shankar is a former top Disney executive and has a joint venture with James Murdoch called Bodhi Tree.

CCI had raised various queries related to the deal, particularly with respect to the proposed combined entity’s cricket broadcasting rights and OTT presence amid anti-competitive concerns.

As per regulations, CCI has to pass a prima facie order within 30 calendar days of the merger being notified to the regulator. However, it has the power to conduct an in-depth inquiry to ascertain possible anti-competitive issues, and in that case, there will be a wider public consultation.

Merger activities in the fast-growing and highly competitive media and entertainment space are slowly gaining pace amid a consolidation trend to stay financially healthy.

Earlier this year, the much-hyped merger involving Sony and Zee failed due to multiple issues, and on Tuesday, the two companies announced that the dispute between them had been settled amicably.

Media ventures of Reliance are currently housed in Network 18, which owns TV18 news channels as well as a plethora of entertainment (under the ‘Colors’ brand) and sports channels. NW18 also has stakes in moneycontrol.com, and bookmyshow and publishes magazines.

Its subsidiary NW18 owns the news channels CNBC/CNNNews.

Reliance separately owns a movie production arm — JioStudios, and majority stakes in two listed cable distribution companies Den and Hathway.

Disney + Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of $71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and cinema channels, such as StarPlus and StarGold as well as sports channels like Star Sports.

While Disney + Hotstar rapidly increased their subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in the 2023-27 cycle, which was won by Reliance-backed Viacom18 for $720 billion, 12.92% higher than what Star India had paid on an average per match value.