India’s Competition Regulator Greenlights $8.5 Billion Reliance-Disney Mega Merger

India’s competition watchdog has given provisional approval to an $8.5 billion (£6.43 billion) merger between Disney and Reliance Industries, setting the stage for the creation of India’s largest entertainment conglomerate. The merger, in which Mukesh Ambani’s Reliance Industries will hold a majority stake, is poised to reshape the nation’s entertainment landscape, putting the new entity in direct competition with global giants like Sony, Netflix, and Amazon.

This strategic alliance will secure broadcasting rights for a vast majority of India’s sports events, including the highly coveted cricket tournaments, making it a dominant player in the sports broadcasting arena. Reports suggest that the merger, expected to be finalized within the next six months, will be overseen by Nita Ambani, the wife of billionaire Mukesh Ambani.

The approval from India’s competition authority comes with certain conditions, as the regulator had earlier expressed concerns about the potential control the merged entity could exert over cricket broadcasting rights, a major draw in a cricket-crazy nation. To address these concerns, the companies have committed to adhering to “voluntary modifications,” according to the regulator’s statement on Wednesday.

Both Disney and Reliance have been key players in the Indian streaming market, particularly by offering free livestreams of cricket matches, a major attraction for subscribers. The two firms have collectively invested $9.5 billion in securing TV and streaming rights for major cricket events, including the Indian Premier League (IPL), T20 World Cups, and International Cricket Council matches.

There were initial fears that the merged entity might leverage its dominance to hike advertising rates for these popular events. However, sources indicate that the companies have pledged to keep advertising prices in check and plan to divest seven to eight of their non-sports TV channels to maintain revenue balance.

Beyond cricket, the merger will also give the new entity broadcasting rights in India for prestigious global events such as Wimbledon, MotoGP, and the English Premier League (EPL).

Gurmeet Chadha, managing partner of financial consultancy Complete Circle, highlighted the significance of the merger in an interview with CNBC-TV18, calling it a “huge digital entertainment giant.” He noted that with India’s vast population of 1.4 billion and a 90% internet penetration rate, the merger’s long-term implications are immense. The new venture will benefit from robust content resources, advanced technology capabilities, and deep insights into consumer preferences, making it a formidable force in the industry.