Novi Digital Entertainment, the owner of the Disney+ Hotstar streaming platform, has begun talks with its parent company, Walt Disney Company-owned Star India. Both companies have filed a merger scheme with the National Company Law Tribunal (NCLT) Mumbai bench. The case is being heard by a division bench consisting of judicial member Reeta Kohli and technical member Madhu Sinha. The corporations want to restructure their streaming, broadcasting, and distribution operations.
In their application, Star and Novi stated that the move would help them achieve economies of scale, enable synergies, increase operational efficiencies, emphasize growth, make the best use of resources, and lower costs. In meetings held on February 8, 2023, the Star and Novi Digital boards accepted the merger plan with April 1, 2022, as the effective date.
"Because Novi Digital and Star India are unlisted entities, they will face relatively less compliance than transactions involving listed companies," said Faiza Dhanani, partner at legal firm Cue Legal. "Apart from shareholders' approval, the companies will have to seek approval from tax authorities, lenders, and sector regulators while adjudicating authority is still hearing the case."
The news comes as Walt Disney hunts for strategic buyers for Star India. According to ET, Walt Disney has approached RIL and Blackstone about a partial to complete sale of Star India, which has a substantial footprint in the linear TV and streaming markets.