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Thursday, December 8, 2022

Sony, Zee to sell 3 Hindi channels in mega-merger deal

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Sony and Zee will sell three Hindi channels in order to resolve any anti-competitive issues raised by their proposed mega-merger. The three channels include Big Magic, Zee Action, and Zee Classic.

Sony and Zee have voluntarily decided to sell three Hindi channels – Big Magic, Zee Action, and Zee Classic – in order to resolve any anti-competitive issues raised by their proposed mega-merger.

They presented their application to the Competition Commission of India (CCI), which approved the agreement with conditions on October 4.

The regulator made public its comprehensive 58-page ruling on Wednesday, more than three weeks after providing its approval for the transaction.

As per the order, the two groups have reached an agreement to sell Hindi film channels, Zee Action and Zee Classic, as well as a Hindi general entertainment channel,  Big Magic.   They voluntarily agreed to the change to the planned merger after CCI determined that the arrangement would have a significant detrimental effect on competition.

Deals over a specific level must be approved by CCI, which attempts to promote fair competition in the industry.

CCI said on October 4 that it has cleared the proposed Zee-Sony merger transaction, which was unveiled in September of previous year.

To promote fair competition in the relevant markets, the regulator has also ordered that the purchaser meet a number of standards before purchasing the three channels.

The buyer must not be “Star India Private Limited or Viacom18 Media Private Limited (including their respective affiliates),” according to one of the conditions. The buyer should be fully independent of the resulting company and its connections. It also cannot be a previous or present employee or director, according to the order (or the spouse or child of such an employee or director).

The purchaser shall have the financial resources, knowledge, and interest, among other things, to retain and expand the divested firm as a viable and active competitor in the relevant market to the parties and/or the new organization.

The order requires the buyer not to raise any prima facie competition concerns, nor create a risk that the order’s implementation will be delayed, and must, in particular, reasonably be expected to obtain all necessary approvals from the relevant regulatory authorities for the acquisition and operation of the divestment business.”

The CCI further noted that if the parties do not comply with the voluntary changes given, the proposed merger would be deemed to have significantly harmed competition in India. Earlier in October, the CCI approved the “merger of Bangla Entertainment Private Limited (BEPL) and Zee Entertainment Enterprises Limited (ZEEL), with Culver Max Entertainment Private Limited (CME), subject to certain adjustments.”

CME’s earlier name was Sony Pictures Networks India Pvt Ltd. (SPNI).

ZEEL and SPNI announced a non-binding term sheet in September 2021 to integrate their linear networks, digital assets, production operations, and program libraries.

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