Mumbai: Sony and Zee have agreed to sell three hindi channels voluntarily – Big Magic, Zee Action, and Zee Classic – in order to address potential anti-competitive concerns raised by their proposed mega-merger. The regulator made public its detailed 58-page order on Wednesday, more than three weeks after giving its approval for the transaction.
According to the order, the two groups have agreed to divest Big Magic, a hindi general entertainment channel, as well as Zee Action and Zee Classic, both Hindi film channels.
They voluntarily agreed to the modification to the proposed deal after CCI determined that the deal would have a significant adverse effect on competition.
They presented their proposal to the Competition Commission of India (CCI), which approved the deal with conditions on 4 October.
CCI announced on October 4 that it had approved the "merger of Zee Entertainment Enterprises Limited (ZEEL) and Bangla Entertainment Private Limited (BEPL) with Culver Max Entertainment Private Limited (CME), with certain modifications".
Previously, CME was known as Sony Pictures Networks India Pvt Ltd. (SPNI). In September 2021, ZEEL announced a non-binding term sheet with SPNI to merge their linear networks, digital assets, production operations, and programme libraries.
Deals exceeding a certain threshold must be approved by CCI, which seeks to ensure fair competition in the marketplace.
CCI announced on 4 October that it had cleared the proposed Zee-Sony merger deal, which was announced in September of last year.
To ensure fair competition in the relevant markets, the regulator has also mandated that the purchaser meet a number of requirements before purchasing the three channels.
One of the requirements is that the buyer not be "Star India Private Limited or Viacom18 Media Private Limited (including their respective affiliates)".
The purchaser should be completely independent of and unconnected to the resulting entity and its affiliates. According to the order, it also cannot be a former or current employee or director (or the spouse or child of such an employee or director).
Among other things, the purchaser must have the financial resources, expertise, and incentive to keep and grow the divestment business as a viable and active competitor to the parties and/or the parties' affiliates.
“The purchaser should 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.
The CCI further stated that the planned merger would be judged to have had a significant detrimental impact on competition in India if the parties did not comply with the voluntary adjustments presented.