Zee-Sony merger
Zee-Sony merger: Media groups agree to sell three Hindi channels to address anti-competition concerns
In an effort to address likely anti-competition issues, media groups Zee and Sony have agreed to sell three channels -- Big Magic, Zee Action, and Zee Classic, that may arise post their proposed merger deal, according to media reports.
India's anti-competition watchdog Competition Commission of India (CCI) approved the merger deal on October 4 subject to certain conditions.
The order made public by the regulator on Wednesday said the two groups have agreed to sell Big Magic, a Hindi entertainment channel, as well as Zee Action and Zee Classic which are Hindi film channels, according to a report in the media.
The groups agreed to the modification to the deal after CCI opined that the deal was likely to cause an appreciable adverse effect on competition.
The regulator has also made it binding on Zee and Sony that the purchaser of the three channels should not be "Star India Private Limited or Viacom18 Media Private Limited (including their respective affiliates)".
The purchaser should be independent of and with no connection whatsoever with the resultant entity and its affiliates. Also, it should not be either a past or present employee or director (or spouse or child of such employee or director), as per the order.
Among other conditions, the purchaser should have the financial resources, expertise and incentive to maintain and develop the divestment business as a viable and active competitor to the parties and/or the resultant entity in the relevant market.
The purchaser "neither be likely to create any prima facie competition concerns, nor give rise to a risk that the implementation of the Order 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 order said.
CCI also noted that in case the parties fail to comply with the voluntary modifications submitted, the proposed combination would be deemed to have caused an appreciable adverse effect on competition in India.
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