PVR, Inox merger in trouble as CCI gets complaint over anti-competitive effects

Following the merger, promoters of Inox will hold a 16.66 percent stake in the new company, while the founders of PVR will hold a 10.62 percent stake. Ajay Bijli, chairman and managing director of PVR, would serve as managing director, and Sanjeev Kumar Bijli would be the executive director of the combined company.

The two businesses had earlier mentioned that CCI certification was not necessary for the merger because the epidemic forced both of them to close for months, which reduced their total income to less than Rs 1,000 crore.

According to a statement from CUTS, the combined company, PVR-Inox, will succeed in becoming the biggest participant in the Indian cinema exhibition sector after the merger, eventually giving them a sizable combined market share in most of the Indian cities.

With a market share of more than 50 percent in at least 19 cities, PVR-Inox will likely overtake the competition as the leading player in 43 cities. According to CUTS, this will result in decreased consumer choice, forcing customers to attend the multiplexes owned by PVR-Inox, high ticket costs, and a potential decline in the quality of the food and services they receive.

Additionally, PVR-Inox's strong negotiating position may result in unreasonable conditions for distributors, suppliers of food and drink, suppliers of technical equipment, and other parties.

According to CUTS, the PVR-Inox agreement would not have qualified for exemption from the necessary merger review by CCI if it weren't for COVID-19 lockdowns. The information was filed on 27 July 2022, and the group awaits to hear from the CCI.

It also noted that over the past 12 years, the movie theatre business has gradually consolidated as a result of multiple mergers and acquisitions, reducing the number of key operators from 11 in 2009-2010 to only five in 2022— namely, PVR, Inox, Carnival Cinemas, Cinepolis, and Miraj Cinemas.