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Disney and Reliance Industries have secured approval from India’s competition watchdog to proceed with a $8.5bn merger of their local entertainment businesses, clearing a major hurdle to the deal following concerns about dominance over cricket broadcasting.
The Competition Commission of India on Wednesday gave the go-ahead to the proposed merger subject to voluntary commitments from the companies.
Officials were concerned about the control Disney and entities largely owned by Reliance, the oil-to-telecoms conglomerate run by India’s richest man Mukesh Ambani, would exert over the streaming and broadcast rights to international cricket and the wildly popular domestic Indian Premier League T20 tournament.
The breakthrough came after the companies agreed to shut down a handful of regional TV channels out of their portfolio of more than 100 stations, people close to the companies said.
The groups also assured the regulator they would not bundle advertisements across their cricket portfolio or raise advertising rates exponentially.
The merged powerhouse would have had a “disproportionate” presence in some parts of the country such as Maharashtra — India’s richest state — where it accounted for about half the market, one of the people said.
“These were the two major concerns they had,” they added. “There’s only so much buying capacity in the market, but we have committed to them that we will behave responsibly and not raise the rates unreasonably.”
The move paves the way for the creation of an unrivalled Indian entertainment giant in the world’s most populous nation, which has lured global media majors, including Netflix and Sony, that have nonetheless struggled to crack the country’s fast-growing but highly price-conscious market.
Mihir Shah, vice-president at consultancy Media Partners Asia, said the joint venture “is set to form a formidable entity . . . with ambitions to redefine the media market landscape and compete more effectively with global digital juggernauts”.
Disney’s pact with Reliance came after it faced heated competitive pressure from the powerful domestic conglomerate and debate within the US entertainment group over the financial underperformance of its India business after acquiring Star India in 2019.
The decisive blow came in 2022 after Disney lost the five-year IPL streaming rights to Viacom18, a joint venture mainly involving Reliance’s JioCinema, in a record $6.2bn auction. Although Disney kept the tournament on its TV network, JioCinema broadcast the tournament for free to Indian cricket fans who are increasingly watching matches on their mobile phones.
The announcement will cheer Ambani ahead of his address to shareholders on Thursday at Reliance’s annual meeting, where the billionaire is known for making grand statements and outlining strategy.
Two people familiar with the matter expressed surprise at the speed of the CCI’s approval, given its apprehensions.
The merger could now be concluded before the end of the year, the people said, with final approval expected to come from India’s information and broadcast ministry following the antitrust regulator’s nod.
Disney declined to comment. Reliance did not respond to a request for comment.
