Star India-Viacom18 merger may take more time as CCI looks into details

The merger of Reliance Industries Ltd-owned Viacom18 and Walt Disney’s Star India, which got NCLT’s green signal last month, may take some more time as antitrust watchdog Competition Commission of India (CCI) will conduct a detailed inquiry into the likely impact of the proposed merger, said a senior government official privy to the matter.

“The merger approval of Star India and Viacom18 will take some time as they have filled Form 2 which will require detailed study,” the official said.

Giving details about Form 2, Sonam Chandwani, Managing Partner, KS Legal & Associates, said, “Form 2 is a detailed notification form required by the CCI for assessing complex mergers that might significantly impact market competition. Unlike the simpler Form 1, Form 2 demands comprehensive information about the merging entities, market structure, and potential competitive effects.”

Chandwani said that the detailed scrutiny involved in reviewing Form 2 ensures that the CCI can thoroughly evaluate the merger’s impact, requiring significant time for analysis.

“This process includes examining market dynamics, potential anti-competitive outcomes, and overall consumer impact. The delay in approving the Star India and Viacom 18 merger reflects the CCI’s diligence in safeguarding fair competition and preventing monopolistic practices,” she added.

In February 2024, Reliance Industries (RIL), Viacom 18 Media Private (“Viacom18”) and The Walt Disney Company (Disney) announced the signing of binding definitive agreements to form a joint venture combining the businesses of Viacom18 and Star India.

Emails sent to Reliance, Star India and CCI did not elicit any response till the time of going to the press. 

Viacom18 is one of India’s largest entertainment networks and has 40 channels across general entertainment, movies, sports, youth, music and kids genres. JioCinema, Viacom18’s OTT platform, is one of India’s leading streaming services.

Their merger will create India’s largest entertainment player.

Analysts said on the sports broadcasting side, the JV will enjoy monopoly as Disney and Jio will collectively control 75-80 per cent of the Indian sports market in both linear TV and digital platforms.

“This dominance in sports, primarily cricket, will help command a substantial share of the overall advertisement market, showcasing strong growth in an industry where sports is a key viewership driver for both linear TV and digital platforms,” said a Elara Securities report in February this year.

The merger comes at a time when a FICCI-EY report revealed that the Indian media and entertainment sector grew by 8 per cent in calendar 2023, reaching Rs 2.3 trillion, 21 per cent above its pre-pandemic levels in 2019.

New media, comprising digital and online gaming, emerged as the frontrunner in growth, contributing Rs 122 billion of the overall increase of Rs 173 billion, and consequently, increased its contribution to the M&E sector from 20 per cent in 2019 to 38 per cent in 2023, the Ficci-EY report.