Zomato confirms discussions with Paytm regarding its movies and events business

Food delivery company Zomato has confirmed discussions with Paytm regarding the acquisition of Paytm's movies and events business.

Pranati Deva
First Published17 Jun 2024, 08:27 AM IST
Food delivery company Zomato has confirmed discussions with Paytm regarding the acquisition of Paytm's movies and events business.
Food delivery company Zomato has confirmed discussions with Paytm regarding the acquisition of Paytm’s movies and events business.(REUTERS)

Food delivery company Zomato has confirmed discussions with Paytm regarding the acquisition of Paytm's movies and events business.

"We have noticed that there are certain news articles circulating in the mainstream media with the subject 'Zomato in talks to acquire Paytm’s movies, ticketing business'. This voluntary disclosure is being made to clarify our stance on the matter given that any transaction that is considered potentially meaningful may create uncertainty in the market. We acknowledge that we are in discussions with Paytm for the aforementioned transaction, however, no binding decision has been taken at this stage that would warrant a Board approval and subsequent disclosure in accordance with applicable law," it said in a regulatory filing.

The above discussion is being undertaken with the intent to strengthen our going-out business further and is in line with our stated position of focusing only on our four key businesses currently added tothe filing.

In a separate filing, Paytm also confirmed ongoing discussions but did not specifically name Zomato. Paytm stated that the potential transfer of its entertainment business, which is part of its marketing services, is one of the opportunities under consideration.

Paytm plans to concentrate on payment and financial services as well as digital goods commerce. It noted that any ongoing discussions are preliminary and non-binding, mirroring Zomato's statement.

According to media reports, this strategic move aligns with Zomato's plan to enhance its 'going out' offerings. Bloomberg previously reported that Paytm is negotiating with Zomato to divest its movie and events ticketing division as part of a strategic overhaul, responding to declining sales, according to sources familiar with the matter. The potential deal could value Paytm's movies and events business at approximately 1,500 crore.

If finalized, this acquisition would be Zomato's second-largest, following its 2021 purchase of quick commerce platform Blinkit (formerly Grofers) in an all-stock deal worth 4,447 crore, reports had said. 

Zomato is increasing its focus on quick commerce by planning to inject an additional 300 crore into its subsidiary Blinkit, amid intensifying competition. This move brings Zomato's total investment in Blinkit to over 2,300 crore. 

The stock's reaction to this news may unfold on Tuesday, given that Indian equity markets are closed on Monday due to a holiday.

On Friday, Zomato ended 0.7 percent higher at 186.19. It has gained around 50 percent in 2024 till date.

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First Published:17 Jun 2024, 08:27 AM IST
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