The National Company Law Tribunal (NCLT) has scheduled the merger application of Walt Disney-owned Star India and Reliance Industries (RIL)-promoted Viacom18 for a final hearing on August 1. This pivotal decision will determine the fate of one of India's largest media consolidations.On July 11, the 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. The notice must be served to the 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 include a statement indicating that if no response is received within 30 days, it will be assumed that the authorities have no objections to the merger scheme.
According to The Economic Times report, legal experts emphasize the significance of the upcoming hearing. Himanshu Vidhani, a partner at law firm Chandhiok & Mahajan, explained that the merger scheme involves two key steps: the transfer of certain identified assets from Viacom18's TV segment to Digital18, followed by the demerger and vesting of these assets from Digital18 to Star India. Vidhani noted, "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."Once approved by the NCLT, the merger will require clearance from the CCI, which is currently scrutinizing the transaction due to its potential impact on the TV broadcasting and streaming sectors.The merger scheme was first admitted by the tribunal on May 7, marking the initial step towards completing this significant transaction. As part of the arrangement, Digital18 plans to transfer Viacom18's assets to Star India, which will then allot proportionate shares to Digital18. Additionally, Star will issue shares to RIL in exchange for a $1.4 billion fund infusion. Following this allotment, the shareholding structure of Star will be divided among Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%).The report added that the merger between Star India and Viacom18 aims to create India's largest media and entertainment entity, valued at $8.5 billion. This new conglomerate is projected to have a combined FY23 revenue of Rs 25,000 crore. The merger is set to reshape the landscape of Indian media, combining the strengths of two major players to offer enhanced content and services to a vast audience.
The outcome of the August 1 hearing will be closely watched, as it holds the potential to significantly impact the media and entertainment industry in India. If the merger is approved, it will pave the way for a new era of growth and competition in the sector.