Proposed merger of PVR and INOX Leisure now faces opposition

19 Aug 2022 , 09:46 AM

A protest has been made against the proposed merger agreement between the operators of multiplexes PVR and INOX Leisure by the non-profit organization CUTS, who claim that the arrangement will have anti-competitive implications on the film exhibition business.

According to a statement released on Thursday, the Consumer Unity & Trust Society (CUTS) has asked the Competition Commission of India (CCI) to look into the situation.

The merger of PVR and INOX Leisure, which would result in the nation’s largest multiplex chain with a network of more than 1,500 screens, was announced on March 27. This move will open up chances in tier III, IV, and V cities in addition to the developed markets.

The united company will be known as PVR INOX Ltd, while the names of the current screens will remain PVR and INOX, respectively. The firms had announced on March 27 that new theatres that have opened since the merger will be known as PVR INOX.

On Thursday, CUTS asserted that the PVR-INOX merger would not have been eligible for an exemption from the CCI’s required merger study if it weren’t for the COVID lockdowns.

Deals that exceed specific levels require regulatory clearance.

The non-profit organization asserted that the proposed agreement might lead to fewer options for consumers and expensive ticket costs.

The statement claims that the complaint was submitted in July, and CUTS is awaiting a response from the watchdog.

PVR and INOX Leisure announced on June 21 that the NSE and BSE had approved their merger.

According to a CUTS press release, the film exhibition sector has undergone gradual consolidation over the past 12 years, and the overall number of key players has decreased from 11 in 2009—2010 to only 5 in 2022.