Ahead of the merger of Sony India and Zee Entertainment, three Hindi channels will be sold off to resolve any anti-competition issues that may pop-up during the merger.
Reports have confirmed that Big Magic, Zee Action, and Zee Classic are the three channels that will be sold off.
There are a few conditions as to who will be able to buy off the channels as well.
Sony and Zee Merger
We had previously reported that Sony would hold the majority stake in the merger of Zee Entertainment Enterprises and SPNI’s Indian businesses in September.
This new development indicates that Sony would own about 53% of the combined company.
The non-binding agreement signed in September states that the remaining shares will be owned by Zee’s shareholders.
Divestment Of Big Magic, Zee Action, Zee Classic
Sony and Zee both submitted their proposal to the Competition Commission of India. It has also been cleared, however with a few modifications.
The CCI has reportedly approved “amalgamation of Zee Entertainment Enterprises Limited (ZEEL) and Bangla Entertainment Private Limited (BEPL) with Culver Max Entertainment Private Limited (CME), with certain modifications”.
Both the companies have agreed to divest the Hindi general entertainment channel Big Magic, and two Hindi film channels, Zee Action and Zee Classic.
The CCI was of the opinion that the deal will cause an adverse effect on the competition.
Rules For Potential Buyers
There are a few rules that the CCI has set for the purchaser of the channels. These are:
- Star India Private Ltd. or Viacom18 Media Pvt. (including their respective affiliates) should not be the buyer.
- The buyer must be impartial and unaffiliated in any way with the resultant entity and its affiliates.
- The buyer should not be a director or employee, either in the past or the present (or spouse or child of such employee or director).
- Both the acquisition and operation of the divestment business must, in particular, reasonably be expected to obtain all necessary approvals from the relevant regulatory authorities.
- Also, the purchaser should neither be likely to give rise to any prima facie competition concerns nor increase the risk that the implementation of the Order will be delayed.
- In order to maintain and grow the divested business as a viable and active rival to the parties and/or the resulting entity in the applicable market, the purchaser should have the necessary financial resources, industry knowledge, and incentive.