The National Company Law Tribunal in Mumbai has given the thumbs up for a merger of Reliance’s arm Viacom18 and Star India, its Digital18 subsidiary, and Walt Disney’s Star India. This means they can go ahead and combine their businesses.
The tribunal wants them to organize a meeting with their creditors, both secured and unsecured, to get their approval for the merger. They’ve appointed retired Justice Suresh Chandrakant Gupte to lead these meetings. If he’s not available, Naina Krishna Murthy will step in as chairperson.
B Narsimhan from BN Associates will oversee the creditors’ meetings for both companies, with Venkataraman K as a backup if Narsimhan is busy. The companies need to send notices and the Viacom18 and Star India merger plan to government bodies and regulators. According to the Economic Times, if they don’t respond within 30 days, it’ll be seen as them not objecting to the merger plan.
Viacom18 and Star India Merger Plan Breakdown
The Viacom18 and Star India merger plan involves two main steps:
- Transfer of Assets: Viacom18’s TV and streaming assets will move to Digital18, then to Star India.
- Compensation: Digital18 will compensate Viacom18 with shares worth Rs 24,186 crore for JioCinema and Rs 2,769 crore for media operations.
Share Distribution:
- Digital18 shareholders will get shares from Star India.
- RIL will receive shares for its $1.4 billion investment.
- After allotment, the ownership breakdown is as follows: Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%).
Viacom18 and Star India Merger: What You Need to Know
In February, Reliance Industries, Viacom18 Media, and Walt Disney Corporation agreed to merge their TV and digital streaming businesses, creating a huge entertainment company in India. The joint venture’s value is Rs 70,352 crore ($8.5 billion), excluding any additional benefits.
Here’s the deal: Viacom18’s media business, part of the RIL group, will join forces with Star India, owned by Disney, through a court-approved arrangement. Reliance Industries will invest Rs 11,500 crore ($1.4 billion) in the venture to support its growth plans. Nita M Ambani will lead the venture as chairperson, with media expert Uday Shankar as vice-chairperson.
Novi Digital Entertainment Merges with Star India
In another development, the NCLT Mumbai bench gave the green light for the merger of Novi Digital Entertainment, which owns Disney+ Hotstar, with its parent company, Star India.
Key Points:
- Viacom18 has two shareholders, RIL and Bodhi Tree Systems, owned by James Murdoch and Uday Shankar.
- Paramount Global decided to sell its 13% stake in Viacom18 to RIL for Rs 4,286 crore.
- The merger application was submitted on March 29, following the announcement of a massive merger deal to create an $8.5 billion media giant.
- Companies must provide details on corporate guarantees, liabilities, legal cases, and financial matters.
- Once completed, the combined Star-Viacom18 entity will have over 100 TV channels and two streaming platforms—Disney+ Hotstar and JioCinema—reaching more than 750 million viewers in India and globally.
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