Final week, Sony-Zee submitted “voluntary treatments” to the deal in writing to assuage watchdog’s considerations
NEW DELHI:
A unit of Sony Group and Zee Leisure have proposed providing concessions reminiscent of pricing reductions to assist ease considerations of the nation’s antitrust regulator over their merger, which is able to create a $10-billion TV behemoth, two sources advised Reuters.
The concessions are a bid to iron out antitrust considerations 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 get pleasure from “un-paralleled bargaining energy” with 92 channels in large media and leisure market.
Particularly, the CCI was involved over how huge an affect on competitors the merged entity would have by way of promoting and channel pricing, notably within the well-liked Hindi language phase. Authorized specialists and former CCI officers stated such scrutiny was set to delay the deal approval course of.
Final week, Sony-Zee submitted “voluntary treatments” to the deal in writing to assuage the watchdog’s considerations, although that didn’t embrace structural modifications 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 considerations.
As a substitute, Sony and Zee instructed no less than two so-called behavioral treatments, the sources stated.
Underneath these, the primary supply stated, Sony and Zee stated their merged entity was open to providing necessary pricing incentives and reductions to all channel distributors, reminiscent of direct-to-home satellite tv for pc operators, on honest and non-discriminatory phrases for a sure interval after the deal.
And to assurance considerations over the entity’s robust market place with advertisers, the events proposed creating and working “unbiased promoting 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 exterior 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 shouldn’t be satisfied with the treatments, the matter will go to Part II — an in depth investigation stage,” stated Vaibhav Choukse, a contest regulation associate at India’s J. Sagar Associates, who shouldn’t be 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 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 delay the method by months at a essential second for the Indian firm.
Zee is a family TV title 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 deal with 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 embrace the likes of Netflix and Amazon Prime Video.