The NCLT on Friday approved the scheme of merger of Reliance Industries-owned Viacom 18 Media — the holding company of the group’s media and entertainment assets — with Star India. A two-member bench of the National Company Law Tribunal (NCLT) approved the composite Scheme of Arrangement among 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 assets of Reliance Industries and The Walt Disney Co to create the country’s largest media empire worth over Rs 70,000 crore.
Approving it, the NCLT observed: “From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy”.
The NCLT in its 22-page-long order also observed that the scheme “will be made effective, in terms of the Scheme, only upon the receipt of the approval of the Competition Commission of India”.
The scheme had proposed the transfer and vesting of Media Operations Undertaking from Viacom 18 and JioCinema into Digital 18, which is a subsidiary of Viacom 18. This would be followed by “demerger, transfer and vesting of V18 Undertaking from Digital 18 into Star India”.
“Since all the requisite statutory compliances have been fulfilled, the said Company Scheme Petition is made absolute in terms of the prayer…,” the NCLT order said.
On Thursday, Reliance Chairman Mukesh Ambani said the mega-merger of media assets of RIL and Walt Disney marks the beginning of a new era in India’s entertainment industry.
Welcoming Disney to the Reliance family, Ambani said just like Jio and the retail business, the expanded media business will be an invaluable growth centre in the Reliance ecosystem.
The deal, announced six months ago, faced scrutiny by the anti-trust regulator and approval from NCLT.
CCI had 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”.
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 owned indirectly by The Walt Disney.
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 Ltd (RIL) 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 per cent stake in the combined entity, which will also be India’s largest media house.
Reliance Industries has also agreed to invest close to Rs 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 RIL Chairman Mukesh Ambani, will head the joint venture, while Uday Shankar will be the Vice Chairperson.