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NCLT Admits Viacom18-Star India Merger Scheme

The Mumbai bench of the National Company Law Tribunal (NCLT) has given the green light to the merger scheme concerning Reliance Industries' Viacom18, its wholly-owned subsidiary Digital18, and Walt Disney's Star India, as per reports.

| Published on May 17, 2024

NCLT Admits Viacom18-Star India Merger Scheme

The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted the merger scheme involving Reliance Industries’ Viacom18, its wholly-owned subsidiary Digital18, and Walt Disney’s Star India. This approval marks the initial step towards completion of the merger deal.

As per reports, on May 7, a division bench consisting of judicial member Kishore Vemulapalli and technical member Anu Jagmohan Singh directed the companies to hold a meeting with their secured and unsecured creditors to seek approval for the merger scheme.

The tribunal has appointed retired Justice Suresh Chandrakant Gupte to chair the meetings of both secured and unsecured creditors of Viacom18, as well as the unsecured creditors of Star India.

Naina Krishna Murthy, Partner – Krishnamurthy & Company, will assume the role in the absence of Justice Gupte as chairperson.

The reports stated that B Narsimhan, the proprietor of BN Associates, has been designated as the scrutiniser for the creditors’ meetings of the two companies. If Narsimhan is unable to fulfill this role, Venkataraman K will be appointed as his replacement.

It has also directed the companies to provide notices along with a copy of the merger scheme to the central government. This should be done through the offices of the regional director (western region) in Mumbai, the Registrar of Companies, the income tax authority, the goods and services tax authorities, the Competition Commission of India (CCI), the Ministry of Corporate Affairs, and other relevant sectoral and regulatory authorities.

The bench declared that if authorities fail to respond to notices within 30 days, it will be assumed they have no objections to the proposed scheme, as per reports.

The merger scheme involves two stages, first, transferring Viacom18’s TV and streaming assets to Digital18. Second, demerging and vesting these assets from Digital18 to Star India.

As part of the agreement, Viacom18 will transfer the streaming platform JioCinema to Digital18. In return, Digital18 will compensate the company with Rs 24,186 crore by allotting 24.18 billion fully paid-up shares valued at Rs 10 each. Additionally, Viacom18 will transfer its media operations to Digital18 in exchange for Rs 2,769 crore, which will be provided through the allotment of 2.76 billion fully paid-up shares, each valued at Rs 10.

Digital18 will transfer Viacom18 assets to Star India. Star India will then distribute proportionate shares to all Digital18 shareholders. Additionally, Star will issue shares to RIL for its fund infusion of $1.4 billion.

On May 15, in another ruling, the NCLT Mumbai bench gave a nod to the amalgamation of Novi Digital Entertainment, the entity behind Disney+ Hotstar, with its parent firm, Star India.

The Star-Viacom18 merger will boast more than 100 TV channels and two streaming platforms—Disney+ Hotstar and JioCinema. With a vast audience of over 750 million viewers in India and abroad, it’s poised to serve the global Indian community.

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