Shares of Reliance Industries' arms, TV18 Broadcast and Network18 Media & Investments, surged as much as 13 percent on August 29 after the Competition Commission of India (CCI) greenlit the merger of RIL and Disney's Indian media assets, paving the way for the creation of a media giant.
At 11:35 am, shares of TV18 Broadcast climbed 7.45 percent to Rs 51.48, while Network18 Media & Investments gained 5.68 percent to Rs 101.65.
The Competition Commission of India (CCI) announced on social media platform X (previously Twitter) platform, "The Commission approves the proposed combination involving Reliance Industries Ltd, Viacom18 Media Pvt Ltd, Digital18 Media Ltd, Star India Pvt Ltd, and Star Television Productions Ltd, subject to compliance with voluntary modifications."
In February, Viacom18, a unit of Reliance Industries, and Disney's Star India combined their media businesses to form India's largest TV and digital streaming entity. As part of the agreement, Viacom18’s media operations will merge with Star India Pvt Ltd (SIPL) through a court-approved scheme. Valued at Rs 70,350 crore ($8.5 billion) post-money, the joint venture will receive a Rs 11,500 crore ($1.4 billion) investment from Reliance Industries to fuel its growth strategy.
The merged Reliance-Disney entity will compete with Sony, Netflix, and Amazon, offering 120 TV channels and two streaming services.
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Karan Taurani, an analyst at Elara Capital, views the CCI’s approval as a major development, noting that the merged entity will capture 40 percent of the TV ad market and 30-34 percent of the digital segment. UBS Securities also echoed similar numbers. The firm estimated the merger entity to dominate with over 40 percent viewership in Linear TV and 50 percent share in digital combined with a near monopoly in cricketing rights.
ICICI Securities also pointed out that the merger will give Reliance’s Viacom18 and Disney’s Indian media business control over most cricketing events in India.
With the merger, Taurani expects a rise in competitive intensity within the media industry, with the impact being negative for Zee Entertainment and other video streaming platforms. UBS also said that although the consolidation is generally positive for the media industry, it could hurt smaller players such as Zee.
Shares of Zee Entertainment fell close to 2 percent to Rs 143.12 while those of Sun TV Network was down nearly 1 percent to Rs 806.40 on the NSE.
Also Read | CCI greenlights Rs 70,350-crore Reliance-Disney India merger
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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