Sony-Zee Merger: The Competition Commission of India (CCI) has said that the merger between Japanese company Sony and Indian company Zee Entertainment could hit India’s domestic market. CCI has expressed this concern in its preliminary review report.
The merger of Sony and Zee Entertainment will create a massive $10 billion TV enterprise. This can harm the competitiveness of the market due to enormous bargaining power. The news agency ‘Reuters’ has reported this with reference to official sources. The CCI, in a notice issued to both the companies on August 3, said further investigation is required in the matter.
Sony and Zee had merged the TV channels, movie assets and streaming platforms of both the companies in December last year to create a stronger and bigger network. The decision comes in the wake of India’s growing entertainment business in the country of 1.4 billion people, to compete with giants like Walt Disney.
Now Sony and Zee deal may be delayed. Speculations are rife after the CCI report that the merger may take some time to get regulatory approval. Indian regulators may pressure both companies to change their structure, sources said.
If both the companies are unable to satisfy the points raised by CCI. So they may face difficulty in getting approval. Apart from that, the contract process can also go on for a long time. Zee said that all steps required by law will be taken to complete the merger process.
In its 21-page notice, CCI said that if the merger agreement is completed, a strong network of 92 channels will be created in the country. Apart from that, Sony’s global revenue will be $86 billion and assets will be $211 billion. The CCI expressed its apprehension of increasing the rates of channel packages due to consolidation of a large number of channels under one company. The CCI has given both the companies 30 days from August 3 to respond to the notice. If not satisfied with the reply given to the notice the matter may be further investigated. Meanwhile, Zee’s managing director Puneet Goenka had said in an interview that the deal is going to be worth around $10 billion. At that time, he expected the agreement to be completed by October 2022.