13 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM Deals $2.5 BLN Data Infrastructure Trust’s acquisition of American Tower Corp’s India operations Deal Type: M&A Firms: S&R Associates; Talwar Thakore & Associates Jurisdictions: India, U.S. $1.5 BLN Maruti Suzuki India Limited’s acquisition of Suzuki Motor Gujarat Deal Type: M&A Firms: Nagashima Ohno & Tsunematsu; Saraf and Partners; Shardul Amarchand Mangaldas & Co Jurisdictions: India, Japan $1 BLN Highways Infrastructure Trust’s acquisition of 12 road projects Deal Type: M&A Firms: Shardul Amarchand Mangaldas & Co; Trilegal Jurisdiction: India $615 MLN Tata Consumer Products’ acquisition of Capital Foods Deal Type: M&A Firms: Anagram Partners; Khaitan & Co Jurisdiction: India $370 MLN Mirae Asset’s acquisition of Sharekhan Deal Type: M&A Firm: Cyril Amarchand Mangaldas Jurisdictions: India, South Korea $260 MLN Indian Renewable Energy Development Agency’s IPO Deal Type: IPO Firms: Dentons Link Legal; Hogan Lovells; Saraf and Partners Jurisdiction: India them an indispensable partner to downstream players, particularly Distribution Platform Operators (DPOs) and advertisers,” Choukse says. WHY IS A SINGLE SPORT SUCH A BIG FACTOR IN THE DEAL? Another market where the combined entities will exercise almost monopoly power is the broadcasting of India’s favourite sport, cricket. The nation of 1.4 billion people is widely reported to account for around 80 percent of cricket’s global revenues, much of which comes from TV advertising. Disney’s Star has exclusive rights over the broadcast of the Indian national teams’ matches – as well as most of the domestic competitions – in India while Reliance’s Jio has rights to the cricket-fanatic country’s biggest cash cow, the Indian Premier League tournament. “In terms of preference, majority of Indian viewers watching cricket or major cricket event would not switch to another sports event like Wimbledon, even if two were broadcast at the same time. From the broadcaster’s perspective, the viewers and advertising revenue generated from cricket is unparallel to any other sport in India. The CCI would be interested in examining if the ‘combined entity’, due to its strong market presence in cricket streaming/ TV broadcasting, can command exorbitant advertising rate, leaving advertisers without bargaining power,” explains Choukse. “CCI would also be keen to examine the licensing terms as an excessively long duration and overboard scope may exclude competing broadcasters from access to attractive content,” he adds. WHAT ARGUMENTS FAVOUR THE DEAL? The lawyers supporting the merger can argue that TV channel distribution is heavily regulated by the Telecom Regulatory Authority of India at both wholesale and retail levels. The new entity will not have the ability to engage in discriminatory and differential pricing/ treatment vis-a-vis downstream partners such as DPOs due to TRAI’s regulations prohibiting any differential or discriminatory pricing/ behaviour, says Choukse. “The parties can also showcase the trend of new players entering the market, leading to decline in their market shares and significant movement of viewers switching to OTT apps,” Choukse adds. On advertising concerns, the parties may submit that advertising agencies and advertisers exert countervailing buying power and can easily switch to other competitors. Also, advertising agencies and advertisers have the ability to switch to digital and other forms of advertising, with more advertisers increasingly shifting towards digital advertising. “In case of CCI concern, the merged entity could offer commitments to not raise ad rates or decrease airtime, for a certain period,” Choukse adds. The CCI’s approval of a similar Zee-Sony merger in 2022 lays a solid precent in favour of the Disney-Reliance deal. Even that approval only came after the parties volunteered remedies to ease competition concerns, including a commitment to divest control in certain TV channels, including Zee Action, Zee Classic and Big Magic. Similar commitments may have to be made by the new RelianceDisney entity in order to obtain the CCI’s approval. But the fallout of the Zee-Sony merger also simplifies things for the deal. “But with the merger called off, Disney-Reliance faces one less major competitor, potentially weakening the argument against the merger on competition grounds,” Choukse says. That said, “the sheer size of the Disney-Reliance merger could still attract significant scrutiny from regulators, especially considering existing concerns about media concentration in India,” Choukse warns. u u
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