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Walt Disney and Reliance Industries have received regulatory approval for their highly anticipated $8.5 billion merger of Indian media assets, after addressing concerns about their dominant position in broadcasting rights for cricket, a sport with an enormous following in India. According to Reuters, the Competition Commission of India (CCI) granted the approval on Wednesday, with the deal moving forward following voluntary modifications proposed by the companies. However, specific details regarding these modifications will be disclosed in a detailed order expected in the coming days.
To overcome regulatory hurdles, Disney and Reliance offered several concessions, including a promise not to raise advertising rates excessively for cricket matches streamed online. Additionally, the companies agreed to divest 7-8 non-sports television channels, as revealed by a source familiar with the matter, per Reuters. These measures were crucial in securing approval for the merger, which is set to create India’s largest entertainment entity, challenging giants like Sony, Netflix and Amazon with a portfolio of 120 TV channels and two streaming platforms.
The merger represents a significant strategic move for Reliance Industries, bolstering the influence of its owner, Mukesh Ambani, who is Asia’s richest person, in India’s $28 billion media and entertainment industry. This regulatory milestone comes just a day before Ambani is scheduled to address shareholders at Reliance’s Annual General Meeting, adding further significance to the timing of the approval.
Related: India’s Antitrust Body Raises Concerns Over $8.5 Billion Reliance-Disney Merger
In the lead-up to the approval, the CCI had reportedly posed around 100 questions to Disney and Reliance regarding the merger, focusing on concerns that the new entity would control a vast majority of cricket broadcasting rights in India, potentially disadvantaging advertisers. Cricket, with its massive following in the country, was a key area of concern for the regulators.
Over recent years, Disney and Reliance have collectively invested approximately $9.5 billion to secure broadcasting and streaming rights for major cricket events, including the Indian Premier League, International Cricket Council tournaments like the one-day and T20 World Cups, and matches hosted by the Indian cricket board. According to Reuters, the companies also committed not to bundle advertising slots across different cricket tournaments and to keep subscription prices within regulatory limits.
While both Disney and Reliance declined to comment on the approval, industry analyst Karan Taurani of Elara Capital indicated that the deal could be finalized within six months, pending approval from an Indian companies tribunal, which is expected to be granted without issue.
The merger will not only consolidate cricket broadcasting rights but will also grant the newly formed entity rights to other prestigious sports events such as the Wimbledon tennis championship, MotoGP and the English Premier League, according to Reuters.
Source: Reuters
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