Zee, Sony agree to sell 3 Hindi channels
Big Magic, Zee Action and Zee Classic on the block to address anti-competition concerns
New Delhi: Media groups Sony and Zee 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 mega-merger deal.
They submitted their proposal to the Competition Commission of India (CCI), which cleared the deal subject to certain modifications on October 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 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 October 4, 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 Limited or Viacom18 Media Private Limited (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.