CCI Tightens the Noose on the Sony-ZEE Merger

India’s antitrust agency raised red flags over the $10 billion worth merger between TV enterprise thus delaying the regulatory approval of the deal. It said that if the merger goes through, the merged company would gain “unparalleled bargaining power”. It issued a notice on 3rd August stating that further investigation into the potential adverse effects on the competition of the merger is merited.

The CCI in its notice, noted that the 92-channel strong relevant market would be affected by the “strong position” of the merged company. Sony currently enjoys a global revenue of $86 billion and own assets worth $211 billion. The aggregate viewership share of ZEE and Sony Pictures Limited which consists of channels in four categories- Hindi general entertainment channel, Hindi films, Bengal Generally entertainment channels and Marathi General Entertainment Channel amounts to more than 40% in each of the markets. The CCI believes the merger could induce an undue increase in the price of channel packages. However, recently the companies had intimated CCI that they have lost significant competition in the media and entertainment spaces and BARC’s data of the relevant period is a testimony to it.

As per some lawyers familiar with the developments said that CCI’s recent objections could force the companies to alter the structure of the deal.