Shares of TV18 Broadcast (TV18) and Network18 Media & Investments (Network18) rallied up to 13 per cent on the BSE in Thursday’s intraday trade after Reliance Industries’ (RIL’s) entertainment arm Viacom18 and Walt Disney Co’s Indian media arm on Wednesday received competition watchdog Competition Commission of India (CCI)’s approval for their $8.5 billion merger.
Shares of Network18 surged 10 per cent to Rs 106.01 amid heavy volumes. At 10:00 AM, the stock was trading 7 per cent higher at Rs 102.53 as compared to 0.22 per cent gain in the BSE Sensex. Average trading volume on the counter jumped over four-fold with a nearly 17 million shares having changed hands on the NSE and BSE together. The stock had hit a 52-week high of Rs 136.20 on January 19, 2024.
The Competition Commission of India (CCI) announced on social media platform X (previously Twitter) platform, “The Commission approves the proposed combination involving Reliance Industries Ltd, Viacom18 Media Pvt Ltd, Digital18 Media Ltd, Star India Pvt Ltd, and Star Television Productions Ltd, subject to compliance with voluntary modifications.”
In February, Viacom18, a unit of Reliance Industries, and Disney’s Star India combined their media businesses to form India’s largest TV and digital streaming entity. As part of the agreement, Viacom18’s media operations will merge with Star India Pvt Ltd (SIPL) through a court-approved scheme. Valued at Rs 70,350 crore ($8.5 billion) post-money, the joint venture will receive a Rs 11,500 crore ($1.4 billion) investment from Reliance Industries to fuel its growth strategy.
The merged Reliance-Disney entity will compete with Sony, Netflix, and Amazon, offering 120 TV channels and two streaming services.
Karan Taurani, an analyst at Elara Capital, views the CCI’s approval as a major development, noting that the merged entity will capture 40 percent of the TV ad market and 30-34 percent of the digital segment. UBS Securities also echoed similar numbers. The firm estimated the merger entity to dominate with over 40 percent viewership in Linear TV and 50 percent share in digital combined with a near monopoly in cricketing rights.
ICICI Securities also pointed out that the merger will give Reliance’s Viacom18 and Disney’s Indian media business control over most cricketing events in India.
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