Mukesh Ambani's company receives green light for Rs 70592 crore merger, shares dip by 3%

Reliance Industries Limited (RIL) led by Mukesh Ambani has received approval from the Ministry of Information and Broadcasting (I&B) for a significant step in its USD 8.5 billion merger with Disney. This approval which was granted on September 28, 2024 allows for the transfer of television channel licenses, marking a key milestone in the creation of one of India's largest media companies.

The I&B Ministry's decision specifically enables the transfer of non-news and current affairs channels from Viacom18 Media Pvt Ltd to Star India Pvt Ltd. This is part of the broader merger plan, where Viacom18’s media channels will now be managed under Star India’s portfolio. Reliance Industries made this regulatory approval public through a formal filing to the stock exchanges. The filing noted that the approval from the I&B Ministry came on September 27, 2024, and included certain conditions set by the Competition Commission of India (CCI), which had already given its approval for the merger in August 2024.

During Reliance’s 47th Annual General Meeting (AGM), Mukesh Ambani highlighted the importance of the merger, calling it a new era for India’s entertainment industry. He emphasized the company's strategy to merge content creation with digital streaming to meet the growing demand for digital entertainment in India. The merger is expected to significantly strengthen Reliance’s presence in the media industry, including broadcasting, digital streaming, and sports rights.

Once the merger is complete, Reliance Industries will have control of over 60% of the combined media company, with a 16% direct stake and another 47% through its Viacom18 Media business. Disney, on the other hand, will retain a 37% stake in the new entity. The merger will combine Reliance’s Viacom18 Media and Digital18 with Disney’s Star India and Star Television.

Nita Mukesh Ambani is set to become the chairperson of the merged entity, while Shankar will take on the role of vice-chairperson. Together, they are expected to lead the new media giant in capitalizing on emerging trends in entertainment and content consumption.

This merger will bring together a vast array of media assets, including popular TV channels such as Colors, Star Plus, Star Gold, Star Sports, and Sports18, with a combined reach of over 750 million viewers across India. In the digital space, the merger will leverage streaming platforms like JioCinema and Disney+ Hotstar. Furthermore, the new company will gain exclusive rights to distribute Disney films and productions in India, along with access to over 30,000 Disney content assets, including popular franchises from Marvel and Lucasfilm. With this content, combined with Warner Bros. Discovery and HBO Originals, the company will cater to a broad audience.

The merger will also focus on regional content, with plans to offer programming in languages such as Tamil, Telugu, Marathi, and Bengali. Sports broadcasting is another key area of focus, where the new company aims to dominate the Indian sports broadcasting market.

Despite the positive developments surrounding the merger, shares of Reliance Industries saw a dip in trading. As of 1:40 PM on the day of the announcement, Reliance shares were down by 3%, trading at Rs 2,970.25 per share. However, the stock has performed well over the past year, delivering returns of over 30%.

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