The Competition Commission of India on Tuesday has approved the merger of Reliance Industries Ltd. with Disney after modifications in the deal. One of the conditions includes no budling of TV ad slot sales for IPL, ICC and BCCI cricketing rights till the end of existing rights.
The parties will also sell seven TV channels, including Hungama and Super Hungama, according to the 48-page detailer order by CCI.
"The parties will not bundle together OTT ad slot sales for all three cricketing rights available with the parties, i.e., IPL, ICC and BCCI, for the balance tenure of the existing rights," the 48-page order said.
The parties have committed to not raising advertisement rates to an unreasonable level on their TV and streaming platforms for ICC and IPL events while they hold the current rights.
The CCI on Aug. 28 approved Reliance Industries' Rs 70,000 crore merger of Viacom18 Media Pvt., Digital18 Media Ltd., Star India Pvt. and Star Television Productions Ltd. Post the merger, Star India will become a joint venture, held by Reliance Industries, Viacom18 and existing TWDC subsidiaries.
The deal, announced earlier this year, had faced scrutiny by the anti-trust regulator, and the approval has come after the parties proposed certain modifications to the original transaction structure.
Reliance and its affiliates will hold a 63.16% stake in the combined entity, while Disney will have the remaining 36.84% shareholding. Reliance has also agreed to invest around Rs 11,500 crore into the joint venture to grow the OTT business.
Nita Ambani, wife of Reliance Industries Chairman Mukesh Ambani, will chair the joint venture, while Uday Shankar will be the vice chairperson.
The shares of Reliance Industries closed lower on Tuesday. The shares fell as much as 2.12% during the day to Rs 2,680.45 apiece on the NSE. The stock closed 1.89% lower at Rs 2,686.70 per share. This compares with a 0.28% decline in the benchmark Nifty 50. It has risen 18.71% in the last 12 months and 3.72% year-to-date.
Out of 38 analysts tracking the company, 30 maintain a 'buy' rating, five recommend a 'hold,' and three suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 36.3%.
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