India’s antitrust authority has preliminarily determined that the $8.5 billion merger of Reliance and Walt Disney‘s media assets could stifle competition. This assessment is based on concerns over their significant influence over cricket broadcast rights.
As per media reports, in a significant blow to their proposed merger, the Competition Commission of India (CCI) has privately communicated its concerns to Disney and Reliance. The CCI has requested that the companies provide explanations as to why an investigation should not be initiated.
The CCI previously posed approximately 100 questions to Reliance and Disney regarding their proposed merger. In response, the companies have indicated their readiness to divest fewer than 10 television channels to address concerns about market dominance and secure early approval for the merger, as per reports.
The CCI has granted companies a 30-day period to provide justifications against the initiation of an investigation.
Earlier, RIL, Viacom18 Media, and The Walt Disney Company announced their agreement to form a joint venture (JV) by signing binding definitive agreements. This venture will merge the operations of Viacom18 and Star India.
RIL agreed to invest Rs 11,500 crore (equivalent to $1.4 billion) at closing into the JV as part of its growth strategy. The transaction values the JV at Rs 70,352 crore (equivalent to $8.5 billion) on a post-money basis, excluding synergies. The JV will be controlled by RIL and will be owned 16.34% by RIL, 46.82% by Viacom18, and 36.84% by Disney.
Also read: Reliance & Disney Offer To Sell Some Channels To Win Antitrust Nod For Merger
