zee: Sony, Zee offer concessions to ease India watchdog worry over merger: Sources

A unit of Sony Group and India’s Zee Leisure have proposed providing concessions resembling 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 informed Reuters.

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

Particularly, the CCI was involved over how massive an impression on competitors the merged entity would have by way of promoting and channel pricing, significantly within the fashionable Hindi language phase. Authorized consultants and former CCI officers stated such scrutiny was set to delay the deal approval course of.

Final week, Sony-Zee submitted “voluntary cures” to the deal in writing to assuage the watchdog’s issues, although that didn’t embrace structural modifications such because the sale of sure channels to cut back the specter of competitors, stated the 2 sources, who declined to be named resulting from confidentiality issues.

As an alternative, Sony and Zee recommended no less than two so-called behavioural cures, the sources stated.

Underneath 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, resembling direct-to-home satellite tv for pc operators, on truthful 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 “impartial promoting verticals” for a sure period, 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 cures by Sony-Zee will probably be a part of ongoing negotiations between the businesses and the watchdog. The latter will probably be free to simply accept or reject them, or ask for extra concessions, they stated.

“If the CCI is just not satisfied with the cures, the matter will go to Section II — an in depth investigation stage,” stated Vaibhav Choukse, a contest legislation accomplice at India’s J. Sagar Associates, who is just not concerned within the matter.

“The CCI has the whip hand and has, on events, adopted a ‘take it or depart it’ strategy,” he added.

Sony and Zee in December determined to merge their tv channels, movie belongings and streaming platforms to create a powerhouse in a key development market of 1.4 billion individuals, that may 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 vital second for the Indian firm.

Zee is a family TV identify in India arrange in 1992 by Subhash Chandra, dubbed the “Father of Indian Tv”. 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 rivals additionally embrace the likes of Netflix and Amazon Prime Video.