NEW DELHI: A merger between the Indian unit of Japan's Sony and Zee Entertainment to create a US$10 billion TV enterprise will potentially hurt competition by having"unparalleled bargaining power", the country's antitrust watchdog found in an initial review, according to an official notice seen by Reuters.
The CCI's findings will delay regulatory approval of the deal and could force the companies to propose changes to its structure, three Indian lawyers familiar with the process said. If that still fails to satisfy the CCI, it could lead to a prolonged approval and investigation process, they added. In its 21-page notice, the CCI said its initial review shows the proposed deal would place the combined entity in a"strong position" with around 92 channels in India, also citing Sony's global revenue of US$86 billion and assets of US$211 billion.
The preliminary CCI competition assessment also showed that the merged entity would have a share of around 45 per cent of the Hindi language segment, which draws the largest audience in the country, with Star a"distant second".Sony and Zee had already responded in June and July to two so-called"defect" letters issued by the watchdog inquiring about the deal.
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