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Zee, Sony Agree To Sell 3 Hindi Channels To Address Anti-Competition Concerns

Sony India and Zee have voluntarily agreed to sell three Hindi channels--Big Magic, Zee Action and Zee Classic.

<div class="paragraphs"><p>Using a remote control. (Photo: Glenn Carstens Peters /Unsplash)</p></div>
Using a remote control. (Photo: Glenn Carstens Peters /Unsplash)

Sony India and Zee Entertainment Enterprises Ltd. have voluntarily agreed to sell three Hindi channels--Big Magic, Zee Action and Zee Classic--to address possible anti-competition concerns arising out of their proposed merger.

They submitted their proposal to the Competition Commission of India, which cleared the deal subject to certain modifications on Oct. 4. More than three weeks after giving its nod for the transaction, the regulator on Wednesday made public its detailed 58-page order.

The two groups have agreed to divest Big Magic, which is a Hindi general entertainment channel, as well as Zee Action and Zee Classic, which are Hindi film channels, according to the order.

They voluntarily agreed to the modification to the proposed deal after the CCI's prima-facie opinion that the deal was likely to cause an appreciable adverse effect on competition.

Deals beyond a certain threshold compulsorily require the approval of CCI, which seeks to ensure fair competition in the marketplace.

On Oct. 4, the CCI said it has cleared the proposed Zee-Sony merger deal, which was announced in September last year.

To ensure fair competition in the relevant markets, the regulator has also mandated various requirements to be fulfilled by the purchaser concerned before buying the three channels.

One of the conditions is that the purchaser should not be 'Star India Private Ltd. or Viacom18 Media Pvt. (including their respective affiliates)'.

The purchaser should be independent of and with no connection whatsoever with the resultant entity and its affiliates. Also, it should not be either a past or present employee or director (or spouse or child of such employee or director), as per the order.

Among other conditions, the purchaser should have the financial resources, expertise and incentive to maintain and develop the divestment business as a viable and active competitor to the parties and/or the resultant entity in the relevant market.

The purchaser "neither be likely to create any prima facie competition concerns, nor give rise to a risk that the implementation of the Order will be delayed, and must, in particular, reasonably be expected to obtain all necessary approvals from the relevant regulatory authorities for the acquisition and operation of the divestment business", the order said.

The divestment business refers to the sale of the three channels.

The CCI also noted that in case the parties fail to comply with the voluntary modifications submitted, the proposed combination would be deemed to have caused an appreciable adverse effect on competition in India.

On Oct. 4, the CCI said it has approved the "amalgamation of Zee Entertainment Enterprises Limited (ZEEL) and Bangla Entertainment Private Limited (BEPL) with Culver Max Entertainment Private Limited (CME), with certain modifications".

CME was earlier known as Sony Pictures Networks India Pvt.

ZEEL, in September 2021, said it has entered into a non-binding term sheet with Sony to bring together their linear networks, digital assets, production operations and programme libraries.