The NCLT on Friday approved the scheme of merger of Viacom 18 Media, owned by Reliance Industries – the holding company for the group’s media and entertainment assets – with Star India. A two-member bench of the National Company Law Tribunal (NCLT) has approved the composite Scheme of Arrangement between Viacom 18, Digital18 and Star India, a unit of global media giant The Walt-Disney.
The development comes two days after the Competition Commission of India approved the merger of media companies Reliance Industries and The Walt Disney Co., creating the country’s largest media empire worth over Rs 70,000 crore.
While approving it, the NCLT observed: “On the basis of the material on record, the scheme appears to be fair and reasonable and does not violate any statutory provisions or public policy.”
The NCLT in its 22-page order also noted that the scheme “shall come into force, in so far as the scheme is concerned, only after receipt of the approval of the Competition Commission of India”.
The plan had proposed the transfer and acquisition of Media Operations Undertaking from Viacom 18 and JioCinema to Digital 18, a subsidiary of Viacom 18. This would be followed by “demerger, transfer and acquisition of V18 Undertaking from Digital 18 to Star India”.
“Since all the requisite statutory obligations have been complied with, the petition for the scheme of business is absolute in so far as the petition is concerned…”, the NCLT order said.
On Thursday, Reliance Chairman Mukesh Ambani said the mega merger of RIL and Walt Disney’s media assets marks the beginning of a new era in the Indian entertainment industry.
Welcoming Disney into the Reliance family, Ambani said that like Jio and the retail business, the expanded media business will be a valuable growth hub in the Reliance ecosystem.
The deal, announced six months ago, was scrutinised by the competition authority and approved by NCLT.
CCI has said that it has approved the “proposed merger of Reliance Industries Limited, Viacom18 Media Private Limited, Digital18 Media Limited, Star India Private Limited and Star Television Productions Limited, subject to voluntary changes”.
Viacom18 is part of the RIL group and SIPL is wholly owned by The Walt Disney Company. STPL, a company incorporated in the British Virgin Islands, is indirectly owned by The Walt Disney.
However, the Competition Commission of India (CCI) has not reported any voluntary changes in the original agreement between the two parties.
Under the agreement, Mukesh Ambani-led Reliance Industries Ltd (RIL) and its subsidiaries will own 63.16 percent of the combined entity, which will house two streaming services and 120 television channels.
Walt Disney will retain the remaining 36.84 percent stake in the combined entity, which will also become India’s largest media house.
Reliance Industries has also agreed to invest around Rs 11,500 crore in the joint venture, giving the company the leverage to take on rivals like Japan’s Sony and Netflix.
Nita Ambani, wife of billionaire RIL chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be vice-chairman.
