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Informist, Friday, Aug 30, 2024

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal today approved the merger scheme of Reliance Industries-owned Viacom18, its wholly owned subsidiary Digital18, and Walt Disney's Star India. The scheme had proposed transfer and vesting of media operations undertaking from Viacom18 into Digital18; transfer and vesting of Jio Cinema undertaking from Viacom18 into Digital18; and demerger, transfer and vesting of Viacom18 undertaking from Digital18 into Star India. 

 

The tribunal said that from the material shown to it, the scheme appeared to be fair, reasonable and not violative of any provisions of law. "Since all the requisite statutory compliances have been fulfilled, the said Company Scheme Petition is made absolute in terms of the prayer Clauses 28 (a) to (g) thereof," said the tribunal today. In February and March, the board of directors of Viacom18 and Star India had approved the scheme, while in March, the board of directors of Digital18 had granted the approval.

 

Viacom 18 is engaged in the business of broadcasting of television channels, distributing, marketing and selling commercial advertising on channels – sports 18, colors, colors rishtey, and others. Viacom18 is also engaged in the business of owning and operating an over-the-top video streaming application known as Jio Cinema. 

 

Star India is engaged in the business of television broadcasting and production, acquisition and distribution of motion pictures. The equity shares of Viacom18, Digital18, and Star India are not listed on the stock exchanges, the tribunal noted.

 

According to the parties, the proposed combination will result in cost reduction due to synergies, thus creating value for shareholders of Viacom18, Reliance Industries group, and Disney group. "The Scheme is being proposed for Viacom18 to remain the holding company of the media operations of RIL group by transferring the media operations undertaking and Jio Cinema undertaking to Viacom18 WOS; and combining V18 undertaking with the business of Star India," said the tribunal.

 

Earlier this week, the Competition Commission of India had approved the merger of media assets of Reliance Industries and Disney India to create the country's largest media empire worth 703.52 bln rupees. After the merger, Reliance will own a 16.34% stake in the joint venture, while Viacom18 will own 46.82%, and Disney the remaining 36.84% stake. Reliance Industries will also invest 115 bln rupees into the joint venture for its growth strategy.  

 

Today, shares of Reliance Industries Ltd closed 0.7% lower at 3,019.25 rupees on the National Stock Exchange, while the shares of TV18 Broadcast closed 0.7% lower at 51.23 rupees.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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