Sony, Zee Offer Concessions To Ease Watchdog Worry Over Merger: Report


Last week, Sony-Zee submitted “voluntary remedies” to the deal in writing to assuage watchdog’s issues

NEW DELHI:

A unit of Sony Group and Zee Entertainment have proposed providing concessions corresponding to pricing reductions to assist ease issues of the nation’s antitrust regulator over their merger, which is able to create a $10-billion TV behemoth, two sources instructed Reuters.

The concessions are a bid to iron out antitrust worries of the Competition Commission of India (CCI), which in an Aug. 3 discover warned the businesses of additional scrutiny, saying their “humongous market position” would permit them to take pleasure in “un-paralleled bargaining power” with 92 channels in large media and leisure market.

In specific, the CCI was involved over how massive an impression on competitors the merged entity would have when it comes to promoting and channel pricing, significantly within the widespread Hindi language section. Legal consultants and former CCI officers stated such scrutiny was set to delay the deal approval course of.

Last week, Sony-Zee submitted “voluntary remedies” to the deal in writing to assuage the watchdog’s issues, although that didn’t embody structural adjustments such because the sale of sure channels to scale back the specter of competitors, stated the 2 sources, who declined to be named as a consequence of confidentiality issues.

Instead, Sony and Zee steered at the very least two so-called behavioural treatments, the sources stated.

Under these, the primary supply stated, Sony and Zee stated their merged entity was open to providing obligatory pricing incentives and reductions to all channel distributors, corresponding to direct-to-home satellite tv for pc operators, on honest and non-discriminatory phrases for a sure interval after the deal.

And to assuage issues over the entity’s robust market place with advertisers, the events proposed creating and working “independent advertising verticals” for a sure length, the supply added.

Spokespersons of Sony and Zee didn’t instantly reply to a request for remark. Representatives of Sony in Japan didn’t reply outdoors common enterprise hours. The CCI didn’t reply to a request for touch upon the concessions.

Three Indian antitrust attorneys acquainted with the processes stated such treatments by Sony-Zee can be a part of ongoing negotiations between the businesses and the watchdog. The latter can be free to simply accept or reject them, or ask for extra concessions, they stated.

“If the CCI is not convinced with the remedies, the matter will go to Phase II — a detailed investigation stage,” stated Vaibhav Choukse, a contest regulation associate at India’s J. Sagar Associates, who just isn’t concerned within the matter.

“The CCI has the whip hand and has, on occasions, adopted a ‘take it or leave it’ approach,” he added.

Sony and Zee in December determined to merge their tv channels, movie property and streaming platforms to create a powerhouse in a key development market of 1.4 billion individuals, that can problem rivals like Walt Disney Co.

The CCI’s preliminary findings, attorneys and former officers have stated, will delay CCI approval of the deal and extend the method by months at a crucial second for the Indian firm.

Zee is a family TV identify in India arrange in 1992 by Subhash Chandra, dubbed the “Father of Indian Television”. Its founders needed to dilute their stake within the Indian firm to sort out debt in 2019 and the Sony deal was struck amid a 2021 boardroom battle with an abroad shareholder.

For Sony, the merger will additional its ambitions to faucet extra digital, TV and regional language audiences within the fast-growing Indian market, the place worldwide opponents additionally embody the likes of Netflix and Amazon Prime Video.



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