The amalgamation has been approved subject to the parties carrying out certain modifications, read a statement from the Competition Commission of India (CCI). While both Sony and Zee welcomed the CCI nod, they didn’t share details on the modifications to be undertaken by them.
CCI was concerned about the impact the combined entity would have on competition in terms of advertising and channel pricing, particularly in the popular Hindi language segment.
Its preliminary assessment had shown that the combined entity would have a 45% share of the Hindi language category, which pulls the largest audience in India, with rival Walt Dis-ney-Star a distant No. 2. Its strong position would also enable it to enjoy unparalleled bargaining power and, as a result, could increase the price of advertisement and channel packages, the CCI had said in its initial review.
Zee said that the CCI has granted approval for the merger with Sony Pictures Networks India (now known as Culver Max Entertainment) after evaluating the legal and economic submissions made by the company. “Considering the immense value which the proposed merger will generate for all its stakeholders, it has offered the necessary remedies in accordance with the regulator’sguidelines. ” It didn’t share what the remedies were.
Media reports claimed that the proposed remedies include the merged entity offering pricing discounts and restructuring its bouquet of channels. The CCI nod takes Sony and Zee a step closer to the merger, which was announced in September last year. Zee will hold a shareholder meeting on October 14 to seek their approval on the amalgamation.
The contours of the proposed deal include the merger of Zee and Bangla Entertainment, an indirect 100% arm of Sony Corporation, into Culver Max Entertainment.
