Zee-Sony Merger: The Competition Commission of India (CCI) on Tuesday approved the mega-merger deal between media groups Sony and Zee. In a tweet, the watchdog said it has cleared the deal with certain modifications. The proposed merger was announced in September last year.
The amalgamation has been approved “with certain modifications", the commission said in an official release, adding that more details would be shared.
Along with Zee, Bangla Entertainment Private Limited (BEPL), which is an indirect-wholly owned subsidiary of Sony Group Corporation, will also be merged with CME.
“The proposed combination relates to (i) amalgamation of each of Zee and BEPL with and into CME; and (ii) preferential allotment of certain shares by CME to Sunbright International Holdings Limited (earlier known as Essel Holdings Limited), and Sunbright Mauritius Investments Limited," CCI stated.
The transaction entails the amalgamation of Zee and Bangla Entertainment Pvt. Ltd, engaged in acquiring rights for motion pictures and other content into Culver Max Entertainment Pvt. Ltd, part of the Sony Group. CCI stated that Culver Max Entertainment has film, sports and kids channels in India and global markets. In India, it reaches over 700 million viewers, the antitrust regulator said.
Persons privy to the development told moneycontrol.com that the fair trade regulator has asked Zee and Sony to ensure no misuse of market dominance, arising out of the merger.
In its official communique, ZEEL stated that the CCI has granted the approval in Phase-1 after evaluating the official legal and economic submissions made by it. Considering the immense value which the proposed merger will generate for all its stakeholders, the company has offered the necessary remedies in accordance with the regulator’s guidelines. “Detailed order is awaited. The approval from the CCI is a yet another positive step in the overall merger approval process,”ZEEL said.
In its order pronounced on September 7, 2022, the National Company Law Tribunal (NCLT) had advised the company to convene and conduct the meeting with its shareholders on October 14, to seek their approval for the proposed merger. The Composite Scheme of Arrangement remains subject to applicable regulatory and other approvals.
“We will now await remaining regulatory approvals to finally launch the new merged company. The merged company will create extraordinary value for Indian consumers and eventually lead the consumer transition from traditional pay TV into the digital future.”Sony Pictures Networks India, said on the CCI approval.
The CCI, as per sources, has cited certain conditions for the same. Once met, the two broadcasting houses will be able to consolidate their TV channels, streaming platforms, as well as their film assets.
Zee Entertainment has stated that in its order pronounced on September 7 2022, the National Company Law Tribunal (NCLT) had advised the company to convene and conduct a meeting with its shareholders on October 14 2022 to seek their approval for the proposed merger.
As per various media reports, the CCI had stated in a 21-page notice that its initial assessment showed the proposed deal will leave the merged business in a strong position” with roughly 92 channels in India, citing Sony’s global revenue of $86 billion and assets of $211 billion.
CCI had claimed that the consolidation has the potential to hurt competition by providing “unparalleled bargaining power.” Recently, Zee and Culver Max offered to close TV channels in the relevant markets if needed in order to allay CCI’s concern over market domination.