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The Indian media landscape is undergoing a significant transformation with the merger of Viacom18 and Star India. This strategic move, which has received the final approval from the Ministry of Information and Broadcasting, will create a media powerhouse with a vast portfolio of channels spanning diverse genres. The merger, valued at $8.5 billion, marks a significant step in the consolidation of India's media industry.
The transfer of 40 TV channel licenses from Viacom18 to Star India, subject to conditions set by the Competition Commission of India, signifies the culmination of a process that began in February 2023. The deal has already secured approvals from the National Company Law Tribunal (NCLT) and the competition watchdog, making this ministerial clearance the final hurdle. With this approval, the merger is expected to be finalized soon.
The combined entity will boast a total of 117 channels, encompassing general entertainment, sports, kids and youth programming. This extensive reach across various genres will enable the merged entity to cater to a wide range of audiences. The merger is expected to yield significant cost and revenue synergies across content, workforce, technology, and monetization. This consolidation will create a media giant with a robust presence in both TV and digital platforms, enhancing its ability to compete in the evolving media landscape.
The post-merger structure will see Reliance holding a 56% stake in the combined entity, while Walt Disney will hold 37%. Uday Shankar and James Murdoch's Bodhi Tree Systems, currently a minority holder in Viacom18, will own the remaining 7%. Nita Ambani will assume the role of chairperson of the newly formed entity, while Uday Shankar will serve as its vice-chairperson.
The merger is projected to generate $2.8 billion in revenue, with a pro forma Ebitda loss of $200 million for fiscal 2024. The merged entity is expected to feature a profitable entertainment division alongside loss-making sports and streaming sectors. While the financial implications of the merger remain to be seen, it is clear that the combined entity will be a major force in the Indian media market. This merger will likely reshape the competitive landscape, influencing content creation, distribution, and consumer engagement in the years to come.
Source: Viacom18 gets I&B ministry approval to transfer TV channels to Star