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Disney and Reliance Industries have won approval from India’s competition regulator to go ahead with a $8.5 billion merger of their domestic entertainment businesses, removing a major obstacle to the deal amid concerns over a monopoly on cricket broadcasting.
The Competition Commission of India on Wednesday approved the proposed merger, subject to voluntary commitment from both companies.
Authorities had feared that Disney and companies in which Reliance, the oil and telecoms conglomerate controlled by India’s richest man, Mukesh Ambani, has a major stake, would seize streaming and broadcasting rights to international cricket and the country’s hugely popular Indian Premier League T20 tournament.
The development comes after the two companies agreed to shut down several local TV stations among their more than 100 broadcast networks, according to people close to the two companies.
The two organisations also assured regulators that they would not bundle advertising across cricket-related businesses or sharply increase advertising rates.
The combined company would have a “disproportionate” presence in some parts of India, such as Maharashtra, India’s richest state, where it accounted for about half the market, one of the people said.
“Those were the two major concerns they had,” they added. “There is limited purchasing power in the market, but we assured them that we would act responsibly and not increase interest rates unreasonably.”
The move paves the way for an unrivalled Indian entertainment giant in the world’s most populous country, which has attracted global media giants such as Netflix and Sony but are still struggling to penetrate the country’s fast-growing but highly price-sensitive market.
Mihir Shah, vice president of consultancy Media Partners Asia, said the joint venture “will create a powerful organisation with ambitions to redefine the media market landscape and compete more effectively with the global digital giants.”
Disney’s deal with Reliance comes as the company faces intense competitive pressure from powerful domestic conglomerates and debate within the U.S. entertainment group over the underperformance of its India operations after acquiring Star India in 2019.
The decisive blow came in 2022 when Disney lost the five-year streaming rights to the IPL in a record $6.2 billion auction to Viacom 18, a joint venture mainly involving Reliance-owned Jio Cinema. Disney continued to show the tournament on its own TV network, but Jio Cinema aired it for free to Indian cricket fans, who are increasingly watching matches on their mobile phones.
The announcement is likely to please Mr Ambani ahead of his address to shareholders at Reliance’s annual general meeting on Thursday, with the billionaire known for making grandiose statements and outlining strategies.
Two people familiar with the matter expressed surprise at the speed of the approval given the CCI’s concerns.
The merger could be completed by the end of the year, pending approval from antitrust regulators and final approval from India’s Ministry of Information and Broadcasting, the people said.
Disney declined to comment. Reliance did not respond to a request for comment.