The first step towards the completion of the mega-merger transaction was taken when the Mumbai bench of the National Company Law Tribunal admitted the merger scheme between Walt Disney's Star India and Reliance Industries Ltd.'s Viacom18, its wholly-owned subsidiary Digital18.

A division bench consisting of technical member Anu Jagmohan Singh and judicial member Kishore Vemulapalli issued an order on May 7 directing the firms to call a meeting of its secured and unsecured creditors to get permission for the merger plan.

The meetings of Viacom18's secured and unsecured creditors and Star India's unsecured creditors will be chaired by retired Justice Suresh Chandrakant Gupte, according to the tribunal.

Partner at Krishnamurthy & Co. Naina Krishna Murthy will take over as chairwoman in Justice Gupte's absence.

The owner of BN Associates, B Narsimhan, has been designated as the scrutinizer for the two firms' creditors meetings. Venkataraman K will take over as the scrutiniser in the event that Narsimhan is unable to fulfill the role.

Additionally, it has mandated that the companies serve notices and a copy of the merger scheme to the central government through the offices of the Registrar of Companies, the Income Tax Authority, the Goods and Services Tax Authorities, the Competition Commission of India (CCI), the Ministry of Corporate Affairs, and other sectoral and regulatory authorities. The offices of the regional director (western region), Mumbai, the Registrar of Companies, and other authorities.

According to the bench, authorities would be deemed to have no objections to the planned program if they do not reply to notices within 30 days.

The TV and streaming assets of Viacom18 are transferred to Digital18 as part of the merger plan. These assets are then demergered and vested from Digital18 to Star India.

Viacom18 would give Digital18 the streaming platform JioCinema in exchange for the plan. Digital18 will then pay Viacom18 a consideration of Rs 24,186 crore by allocating 24.18 billion fully paid-up shares at a price of Rs 10 apiece.

Additionally, Viacom18 will hand over its media activities to Digital18 in exchange for 2.76 billion fully paid-up shares at a price of Rs 10 apiece, or a value of Rs 2,769 crore.

After that, Digital18 will provide Star India the Viacom18 assets, and Star India will distribute the proportionate shares to each Digital18 shareholder. In addition, Star will give RIL shares in exchange for its $1.4 billion funding injection.

Following the allocation of shares to Digital18 and RIL, Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%) will retain the remaining shares in Star India.

The NCLT Mumbai bench has authorized the combination of Novi Digital Entertainment, the proprietor of Disney+ Hotstar, and Star India, its parent company, in a separate ruling dated May 15.

It is important to remember that Bodhi Tree Systems, which is supported by James Murdoch and Uday Shankar, and RIL and its group companies are the two shareholders of Viacom18. In order to depart Viacom18, Paramount Global has chosen to sell RIL its 13% interest for Rs 4,286 crore.

A month after the massive merger agreement was announced, the businesses submitted their application on March 29. The result will be the establishment of a $8.5 billion media conglomerate that will hold dominant positions in both the linear TV and video streaming markets.

In addition to details of litigation, letters of credit, and margin money, the applicant firms must furnish information on their corporate guarantee, performance guarantee, contingent liabilities, and whether they have any outstanding IBC proceedings.

The ruling is a significant procedural step towards the merger, according to Ashish K. Singh, managing partner of the legal company Capstone Legal. Both parties must arrange the meeting and provide the NCLT with a list of all IBC-related lawsuits they have ever been involved in. The higher interest of shareholders is the reason behind this activity, according to Singh.

With the combination of Star-Viacom18, there will be more than 100 TV channels and two streaming services: JioCinema and Disney+ Hotstar. The organization will serve the more than 750 million Indian viewers in India as well as the Indian diaspora abroad.