New Delhi: Fair trade regulator CCI has sought comments from the public on movie theatre chain PVR's proposed Rs 500-crore worth acquisition of DT Cinemas, after finding that prima-facie the deal was likely to adversely impact competition.
This is at least the third time in a little over a year that Competition Commission of India (CCI) has put a major deal for public scrutiny.
Last year, the watchdog had sought comments from public on two mega transactions - the $4 billion Sun Pharma-Ranbaxy combination and Holcim-Lafarge deal.
In both instances, the regulator had called for divestment of certain assets by the entities concerned to address anti-competition concerns.
"The Commission is of the prima-facie opinion that the combination is likely to have an appreciable adverse effect on competition...
"... and accordingly has directed PVR to publish details of the combination for bringing the combination to the knowledge or information of the public and persons affected or likely to be affected by such combination," the regulator said in a release.
PVR had approached the regulator in July seeking approval for the deal with DT Cinemas - the film exhibition business of DLF Utilities Ltd comprising 39 screens (29 existing and 10 upcoming) in Delhi, Gurgaon, Noida and Chandigarh.
Public comments on the deal can be submitted to the regulator till January 5, 2016.
In June, PVR announced the deal to acquire realty major DLF's DT Cinemas for Rs 500 crore - a transaction that marked a significant consolidation in the country's cinema exhibition business.
As part of the transaction, PVR would buy 39 screens of DT Cinemas having a total capacity of around 9,000 seats.
Post the deal, PVR would have presence in 44 cities with 115 multiplexes and 506 screens, the company had said in June.
CCI's decision to put the deal under public scrutiny also comes at a time when it is boosting efforts to curb unfair business practices and ensure a level playing field for entities across sectors.
PVR has submitted to the Commission that the proposed combination would not impact or limit consumer choices due to presence of various theatres in the market.
Film exhibition services in Delhi-NCR and Chandigarh is being considered as the relevant market.
Besides, the company has cited absence of high barriers to entry into the market and the resulting fluctuations in future market share of the operators as a reason that the combination would not have any appreciable effect on competition in India.
"The acquirer (PVR) submits that at the upstream level, the proposed combination will not provide PVR with any additional market power in terms of the relationship with film distributors since the latter work on a non-exclusive basis and the revenue sharing is also same across all distributors," as per the public notice.
The deal does not confer the ability to either increase or decrease the quality of services offered "without directly resulting in a reduction in the occupancy and footfalls in its theatres", the company has submitted to the regulator.
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