BackCCI approves Carnival-Big Cinemas deal
The proposed combination is not likely to have an appreciable adverse effect on competition in India, says CCI
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Mumbai: The Competition Commission of India (CCI) on Tuesday gave its approval to the acquisition of Big Cinemas, a division of tycoon Anil Ambani’s Reliance MediaWorks Ltd, by Carnival Films Pvt. Ltd.
On 15 December last year, Mint reported that Carnival Films, backed by a Kochi-based commodity trader, agreed to acquire a 100% stake in multiplex operator Big Cinemas for around ₹ 700 crore.
In an order posted on its website, CCI said, “The Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission hereby approves the same."
CCI noted that the acquisition would result in overlaps between Carnival and Reliance MediaWorks, with respect to the multiplexes in seven cities—Indore, Mumbai, Dindigul, Ghaziabad, Dehradun, Raipur and Ajmer.
In Indore, Mumbai, Ghaziabad, Dehradun, Raipur and Ajmer, competition concerns may not arise as there are other multiplexes in addition to cinemas operated by Carnival and Reliance MediaWorks in these cities, exerting competitive constraints on the acquirer.
The Carnival-Big Cinemas deal was the fourth transaction in the movie exhibition business last year, as multiplex operators went for consolidation, partly to increase their bargaining power with film producers and distributors, and to gain a bigger share of box office receipts in India’s ₹ 9,200 crore movie industry.
Inox Leisure Ltd, India’s second largest multiplex operator, acquired Delhi-based Satyam Cineplexes Ltd for nearly ₹ 240 crore, paying ₹ 182 crore in cash and taking over its debt in a deal that expanded Inox’s presence to 50 cities, with 91 multiplexes and 358 screens.
Housing Development and Infrastructure Ltd (HDIL) sold its multiplex business Broadway Cinemas to Carnival Cinemas, and Mexican multiplex chain Cinepolis bought Fun Cinemas, the multiplex chain promoted by Subhash Chandra’s Essel Group through E-City Ventures.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay High court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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