TaxTMI 
TaxTMI 
2018 (11) TMI 1043
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Merger' on 20th June, 2018. It has been submitted by the Acquirers that Holdco is a wholly owned subsidiary of TWDC. Further, Delta Sub and Wax Sub are wholly owned subsidiaries of Holdco. (Hereinafter, TWDC and 21CF are collectively referred to as the "Parties"). 3. The proposed combination relates to the acquisition of 21CF, including its film and television studios, cable and international TV businesses, by TWDC. The proposed combination involves following steps: (i) Prior to the acquisition, 21CF will separate the portfolio of 21CF's news, sports, and broadcast businesses, including the Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes, and Big Ten Network, and certain other assets ("Separated Assets"). These Separated Assets do not form part of the proposed combination and accordingly, will be grouped in a newly listed company that will be spun off to existing shareholders of 21CF; (ii) Subsequently, Delta Sub will merge with and into TWDC, resulting in TWDC becoming a wholly owned subsidiary of Holdco, with Holdco's shareholding structure mirroring TWDC's shareholding....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Vijay and Maa. A. Horizontal Overlaps 7. Based on submission given by the Acquirers, the business segments in which activities of the Parties overlap in India and their competition assessment are, as follows: 7.1 Overlap in production and supply of films to third-party distributors and exhibitors for theatrical release in India i. The Acquirers have submitted that activities of the Parties overlap in the business of production and supply of films to third-party distributors for theatrical release in India. Given that the films can be sub-segmented on the basis of language, the Commission assessed overlap in production and supply of films to third-party distributors and exhibitor for theatrical release in India separately for English films, Bollywood films and Regional films. However, the exact delineation of relevant market is being left open. ii. Based on the submission, the Commission notes that the combined market share (based on the gross box office receipt) of the Parties for English movies distributed in India has gone down from 60 - 65 percent in 2016 to less than 30 - 35 percent in 2017. In this context, the Commission observes that the production shares can var....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... exhibitor to reduce the number of screenings of an underperforming title. On the basis of foregoing, the Commission observes that third-party distributors and exhibitors too would continue to impose a competitive constraint on the Parties' behavior, post-combination. vii. Based on the foregoing, the Commission observes that the proposed combination is not likely to result in appreciable adverse effect ("AAEC") on competition in the business of production and supply of films to distributors and to exhibitors, including its sub-segments. 7.2 Overlap in the business of licensing of audio-visual contents in India i. The Commission notes that the activities of the Parties overlap in the business of licensing of audio-visual contents in India. The Acquirers have submitted that there are overlaps between the Parties in the following sub-segments on the basis of genre, namely, business for the licensing of film-content rights, business for the licensing of sports-content rights and business for the licensing of 'non-film and non-sports' content. The Commission noted the submissions of the Acquirers and decided to leave delineation of relevant market open. ii. With respect to the b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k having nine channels and market share of 0 - 5 percent. In view of the above, the Commission notes that there is no AAEC in the operation and wholesale supply of Films' channel in India. iii. Infotainment and Lifestyle: For the year 2017, the market share of TWDC was 5 - 10 percent (with three channels) and 21CF had 15 - 20 percent (with six channels), and combined market share of the Parties was 25 - 30 percent. Further, the Parties face competition from players in the market such as Discovery Network having nine channels and market share of 30 - 35 percent, Zee Entertainment (with two channels) and Sony Pictures (with two channels) and each having market share of 0 - 5 percent, Food Food having one channel and market share of 0 - 5 percent. In view of the above, the Commission notes that there is no AAEC in the operation and wholesale supply of Infotainment and Lifestyle channels in India. iv. Kids: In the year 2017, the market shares of TWDC was 30 - 35 percent (with four channels), however, 21CF has insignificant presence in this sub-segment. Further, the Parties face competition from players in the market such as TV18 Broadcast Ltd. having four channels and market share ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from other players in the market such as 9X Media having five channels and market share of 15 - 20 percent, TV18 Broadcast Ltd. having seven channels and market share of 5 - 10 percent, Zee Entertainment having two channels and market share of 0 - 5 percent, Sony Pictures Networks having two channels and market share of 5 - 10 percent, etc. On the basis of the foregoing, the Commission observes that there is no likelihood of AAEC in this sub-segment. ix. Sports: The Commission notes that though 21CF has sizeable market share in this business sub-segment, however, for reasons already discussed above (paragraph 7.2 (iii)), there would be no change in the market dynamics as result of the proposed combination. 7.4 Retail Supply of Audio Visual Content in India i. The Commission notes that the Parties are present in the retail supply of audio-visual content in India through over-the-top applications ("OTT"). Whereas 21CF is present in this segment through its online video streaming platform 'Hotstar' and 'BabyTV' applications, TWDC is present through its 'Bindass' application. The Commission notes that combined market share of the Parties post-combination would be 30 - 35 percent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on the submission of the Acquirers, notes that neither TWDC nor 21CF actually publish any books in India. However, TWDC and 21CF are present through the licensing route - i.e. they license their intellectual property to third-party publishers who publish non-academic books and magazines (such as comic books, graphic novels etc.) in India. Thus, the Parties' revenues from the market for publishing are solely on account of the fees / royalty earned through such licensing. The combined presence of the Parties in the market for publishing is insignificant, and as such, the Commission notes that there would be no adverse impact on competition in this business segment due to the proposed combination. 7.9 Interactive Media in India i. Interactive media is a means of actively engaging with the customers by providing an interactive form of entertainment, which includes games and digital media, music, video, mobile and graphics. The Parties are engaged in the interactive media by licensing of intellectual property (such as characters) as well as audio-visual content to a variety of companies, including companies which make games (such as Ubisoft) as well as telecom companies who use su....