The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday cleared the Viacom18 and Star India merger deal, days after the Competition Commission of India (CCI) approved the transaction, valued at `70,000 crore ($8.5 billion), with modifications.
A two-member bench comprising Justices Kishore Vemulapalli and Anu Jagmohan Singh approved the composite scheme of arrangement among Viacom18, Digital18, both part of the Reliance (RIL) group, and Star India, a unit of global media giant The Walt Disney Company.
More importantly, the NCLT and CCI approvals will pave the way for the formation of the Reliance-Disney joint venture (JV), which was announced earlier this year. On Thursday, RIL CMD Mukesh Ambani had said that the Reliance-Disney partnership marked a “new era in India’s entertainment industry”, combining “content creation with digital streaming”.
“Our digital-first approach will deliver unparalleled content at affordable prices. We will cater to every consumer’s tastes,” Ambani, 67, said.
The overall transaction, as announced in February, first entailed the merger of Viacom18 into Star India, followed by the formation of the JV, in which Reliance and its affiliates would have a 63.16% stake and the Walt Disney Company would have a 36.84% stake. Reliance will also invest Rs 11,500 crore into the JV as part of its commitment to grow the combined entity which will have two streaming services and 115 television channels.
“From the material on record, the Scheme appears to be fair and reasonable. It is not violative of any provisions of law and is not contrary to public policy,” the 22-page NCLT order, released on Friday, said.
“The proposed combination will result in cost reduction due to synergies, thus creating value for shareholders of Viacom18, Reliance Industries (RIL) group and Disney,” it added.
RIL and Disney had indicated earlier this year that they were looking to close the merger deal by the fourth quarter of the 2024 calendar year. Media and legal experts said that the two companies may close the deal by October itself, given the pace with which they are moving, which is in stark contrast to the now-junked Sony-Zee merger deal, which dragged on for two years before being called off earlier this year.
On Tuesday, Zee and Sony settled the legal dispute arising out of the failed merger, saying that they would mutually drop their claims against each other at the Singapore International Arbitration Centre as well as India company courts, allowing them to independently pursue growth opportunities. None of the parties would have outstanding or continuing obligations or liabilities to the other, they said, adding that it was a non-cash settlement.