CCI Flags Concerns Over Viacom18-Star India Merger
Aug 21, 2024 19:47
CCI has raised concerns over the proposed Viacom18-Star India merger, seeking detailed replies from the companies. The regulator may conduct public scrutiny if concerns are not addressed.
Photograph: Dado Ruvic/Illustration/Reuters
New Delhi, Aug 21 (PTI) The Competition Commission of India (CCI) has flagged possible anti-competitive concerns with respect to the proposed USD 8.5-billion Viacom18-Star India merger and has sought detailed responses from the parties concerned, sources said.
In case the regulator is not satisfied with the replies, it can go for public scrutiny of the deal, they added.
After the companies filed an application with the CCI for deal approval in May this year, the watchdog had sought various clarifications and additional information from the parties.
The sources said the parties have been served show cause notice asking why a detailed scrutiny of the deal should not be carried out as there are anti-competitive concerns in relation to certain business segments, including cricket broadcasting rights.
Queries sent to CCI and Disney-Star did not elicit any response.
Viacom is owned by Reliance Industries and Star India is part of the Walt Disney Company.
Once the multi-billion dollar deal, announced in February this year, is completed, it would create the biggest firm in the Indian media and entertainment sector, with over 100 channels in several languages, two leading OTT platforms and a viewer base of 750 million across the country.
Under the competition law, CCI can push the deal for larger public scrutiny in case there are prima-facie concerns of anti-competition aspects. In such a case, the parties concerned will be required to make public details about their proposed transaction for larger consultations. The regulator has also powers to direct the companies to divest some of their assets to address anti-competition issues.
It is rare for CCI to move for public scrutiny of a proposed deal as generally, companies concerned present plans to the regulator to address the concerns.
As per the notice submitted to CCI seeking approval for the deal in May, the proposed transaction aims to combine the entertainment businesses (along with certain other identified businesses) of Viacom18, part of Reliance Industries Ltd (RIL) group and SIPL, wholly owned by The Walt Disney Company (TWDC).
"As a result of the transaction, SIPL, currently a wholly owned entity of TWDC through its subsidiaries, will become a joint venture (JV) which will be jointly held by RIL, Viacom18 and existing TWDC subsidiaries," it had said.
According to the notice, the proposed transaction will not cause any appreciable adverse effect on competition in India.
In the notice, the entities identified several key markets where horizontal overlaps were significant such as licensing of audio visual content rights, distribution of broadcast TV channels, provision of audio visual content, and supply of advertising space in India.
SIPL is engaged in a range of media activities, including TV broadcasting, motion pictures and operation of an OTT platform. It is a wholly owned entity of US-based The Walt Disney Company (TWDC).
Viacom18 is engaged in the business of broadcasting of television channels, operation of an over-the-top platform, in India and worldwide. It is also engaged in the business of production and distribution of motion pictures.
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.