The Competition Commission of India has given conditional approval to the proposed merger between Zee Entertainment Enterprises Ltd (ZEEL) and Sony.
CCI said in a tweet that it has cleared the deal with certain modifications. Experts assume that the CCI has asked both parties to ensure that there is no abuse of its market dominance.
CCI concerns and approval
CCI raised some concerns over the merger after ZEE and Sony made a presentation last week.
During the meeting, the two companies said they will not abuse their market dominance and not charge a higher fee from advertisers or DTH providers for a fixed period.
In August, the CCI had communicated to the companies through a notice that their “humongous market position’’ would allow them to enjoy “unparalleled bargaining power”.
The CCI was reportedly concerned about the impact the merger would have in terms of advertising and channel pricing, particularly in the Hindi language segment.
The CCI said it has approved the “amalgamation of ZEEL and Bangla Entertainment Private Limited (BEPL) with Culver Max Entertainment Private Limited (CME) earlier known as Sony Pictures Networks India Pvt Ltd (SPNI), with certain modifications”. It is learnt that the approval was given after the regulator accepted the voluntary remedies proposed by the parties.
Zee had added that the combined entity will own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.
“We will now await remaining regulatory approvals to finally launch the newly 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,” a statement from Sony said.
As part of the deal, Zee founder Subhash Chandra’s son, Punit Goenka, will continue to be the combined company’s managing director and chief executive. In addition, Sony will pay a non-compete fee to promoters of Zee, which they will use to infuse primary equity capital into SPN, allowing them to buy shares of the company.
The shares would eventually equal approximately 2.11% of the combined company’s shares
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