The National Company Law Tribunal (NCLT) has scheduled the final hearing for the proposed merger between Walt Disney-owned Star India and Reliance Industries (RIL)-promoted Viacom18 on August 1. This hearing is crucial for the merger’s approval and subsequent execution.
On July 11, the NCLT division bench, comprising technical member Anu Jagmohan Singh and judicial member Kishore Vemulapalli, directed both parties to issue a fresh notice for the final hearing.
This notice must be served to central and state governments, tax authorities, and regulatory bodies, including the Competition Commission of India (CCI) and the Ministry of Information and Broadcasting. The notice should state that if no response is received within 30 days, it will be assumed that the authorities have no objections to the merger.
Legal experts emphasize the importance of this hearing. Himanshu Vidhani, a partner at Chandhiok & Mahajan, noted that the merger involves two key steps: transferring certain assets from Viacom18’s TV segment to Digital18, and then demerging and vesting these assets from Digital18 to Star India. Vidhani explained, “The NCLT will decide on August 1 whether to sanction the scheme. If sanctioned, the scheme must be executed as per its terms and submitted for stamp duty adjudication with the superintendent of stamps.”
Following NCLT approval, the merger will need clearance from the CCI, which is currently evaluating the transaction’s impact on the TV broadcasting and streaming sectors.
The merger scheme, first admitted by the tribunal on May 7, involves Digital18 transferring Viacom18’s assets to Star India. Star will then allot proportionate shares to Digital18 and issue shares to RIL in exchange for a $1.4 billion fund infusion. Post-allotment, the shareholding structure of Star will include Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%).
The merger aims to create India’s largest media and entertainment conglomerate, valued at $8.5 billion, with a combined FY23 revenue of Rs 25,000 crore. This significant transaction is poised to reshape the Indian media landscape, merging the strengths of two major players to deliver enhanced content and services.
The outcome of the August 1 hearing will be pivotal, potentially ushering in a new era of growth and competition in India’s media and entertainment sector.
