Reliance-Disney Merger Receives NCLT Approval

The National Company Law Tribunal, Mumbai, has approved the media merger between Viacom18 and Star India on Friday. Recently, the Competition Commission of India also sanctioned the merger.

The regulator observed that the companies had complied with all procedural requirements. It was further noted that no objections were raised to the merger by the Regional Director, Official Liquidator, Income Tax Department, or the GST Department.

The NCLT also stated that while no prior approval from the Ministry of Information and Broadcasting is needed, the ministry’s approval will be required for the transfer of Viacom18’s TV channels to Star India post-sanction of the scheme.

The companies are set to merge their media operations in India, forming a combined entity valued at Rs 70,000 crore. Reliance will hold a 63.16% stake and invest Rs 11,500 crore into the joint venture, focussing on expanding the OTT business. Disney will own the remaining 36.84% share. Nita Ambani will chair the venture, and Uday Shankar will serve as vice chairperson.

Finally, as part of the merger proceedings between Reliance Industries and the Walt Disney Co., assurances have been provided to the Income Tax Department through an affidavit dated July 30, 2024. The company affirmed that the approval of the merger scheme will not affect the Income Tax Department's rights in any current or future tax proceedings. The Department retains the right to pursue any necessary actions related to tax avoidance or violations.

Additionally, the GST Department raised concerns regarding a potential liability of Rs 13 crore associated with Viacom18. In response, Viacom18 submitted an affidavit dated July 18, 2024, stating that the GST Department's interests will not be compromised by the merger. The company assured that any pending legal proceedings would continue as usual, and any GST liabilities would be addressed in compliance with the applicable laws.