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    Case Study of PVR and DT Cinema Combination

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    Rajdeep Singh
    The merger between PVR Cinemas and DT Cinemas in 2016 created India's largest cinema operator and consolidated PVR's position in Delhi and NCR where it gained a 65% market share. While the Competition Commission initially blocked the deal for anti-competitive concerns, an appellate tribunal later approved it. The acquisition helped PVR expand its presence and diversify its premium offerings.

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    Case Study of PVR and DT Cinema Combination

    Uploaded by

    Rajdeep Singh
    224 views3 pages
    The merger between PVR Cinemas and DT Cinemas in 2016 created India's largest cinema operator and consolidated PVR's position in Delhi and NCR where it gained a 65% market share. While the Competition Commission initially blocked the deal for anti-competitive concerns, an appellate tribunal later approved it. The acquisition helped PVR expand its presence and diversify its premium offerings.

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    The merger between PVR Cinemas and DT Cinemas in 2016 created India's largest cinema operator and consolidated PVR's position in Delhi and NCR where it gained a 65% market share. While the Competition Commission initially blocked the deal for anti-competitive concerns, an appellate tribunal later approved it. The acquisition helped PVR expand its presence and diversify its premium offerings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    224 views3 pages

    Case Study of PVR and DT Cinema Combination

    Uploaded by

    Rajdeep Singh
    The merger between PVR Cinemas and DT Cinemas in 2016 created India's largest cinema operator and consolidated PVR's position in Delhi and NCR where it gained a 65% market share. While the Competition Commission initially blocked the deal for anti-competitive concerns, an appellate tribunal later approved it. The acquisition helped PVR expand its presence and diversify its premium offerings.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Case Study on PVR and DT Cinema Combination

    Facts
    • The merger between PVR Cinemas and DT Cinemas was one of the biggest consolidation deals in
    the Indian cinema industry. Here is a brief case study of the PVR and DT Cinema combination:
    • In 2016, PVR Cinemas announced the acquisition of DT Cinemas from DLF Group for
    approximately Rs 500 crore ($75 million). The acquisition allowed PVR to expand its reach in
    North India, particularly in Delhi and the National Capital Region (NCR). DT Cinemas had 29
    screens across eight locations in NCR and Chandigarh.
    • The combination of PVR and DT Cinemas created a formidable player in the Indian cinema
    industry, with a total of 126 screens across 50 locations in India. The merger gave PVR a dominant
    position in the Delhi and NCR market, where it now has a 65% market share.
    • The merger was also expected to result in cost synergies for PVR, particularly in the areas of
    procurement, advertising, and marketing. The consolidation of operations was expected to lead to
    cost savings of around Rs 30-35 crore ($4.5-5 million) per year.
    • However, the acquisition also faced challenges. The Competition Commission of India (CCI)
    initially rejected the merger in 2014, citing concerns about anti-competitive practices and
    dominance of PVR in the Delhi and NCR market. PVR appealed the decision, and in 2016, the
    Competition Appellate Tribunal (COMPAT) overturned the CCI's ruling and allowed the merger to
    proceed.
    • Despite the challenges, the PVR and DT Cinema combination has been largely successful, with
    PVR consolidating its position as the largest cinema operator in India. The acquisition has also
    allowed PVR to expand its presence in new markets and diversify its offerings, with the addition of
    DT Cinemas' premium and luxury cinema formats.
    Facts-in-Issue

    • The main issue in this case was whether the acquisition of DT Cinemas by PVR Cinemas would
    result in a violation of competition law in India.

    • The Competition Commission of India (CCI) investigated the proposed acquisition and found that
    it was likely to result in an adverse effect on competition in the relevant market. The CCI noted that
    the combination of PVR Cinemas and DT Cinemas would result in PVR having a dominant
    position in the movie exhibition market in the National Capital Region (NCR) of India, which
    could lead to higher prices and reduced choice for consumers.
    Laws Relevant in Case
    • In the PVR and DT Cinema combination case, the following sections of the Competition Act, 2002
    were relevant:
    • Section 5: Prohibition of certain agreements: This section prohibits agreements between enterprises
    that have an appreciable adverse effect on competition (AAEC) within India.
    • Section 6: Prohibition of abuse of dominant position: This section prohibits an enterprise from
    abusing its dominant position in a relevant market in India.
    • Section 20: Power to inquire into certain agreements and dominant position of enterprise: This
    section empowers the CCI to inquire into agreements between enterprises and dominant positions
    in a relevant market.
    • Section 31: Orders by Commission after inquiry into agreements or abuse of dominant position:
    This section empowers the CCI to pass orders after conducting an inquiry into agreements or abuse
    of dominant position.
    Judgment
    • The PVR and DT Cinema combination case was approved by the Competition Commission of
    India (CCI) in 2010. The combination was scrutinized under Section 6(1) of the Competition Act,
    2002, which deals with the regulation of combinations.
    • Under Section 6(1), any combination that causes or is likely to cause an appreciable adverse effect
    on competition within the relevant market in India is prohibited. The term 'combination' includes
    mergers, amalgamations, acquisitions, and any other form of corporate restructuring.
    • In the PVR and DT Cinema case, the CCI evaluated the impact of the combination on competition
    within the relevant market in India and determined that the combination would not have any
    appreciable adverse effect on competition. The CCI also considered the potential benefits of the
    combination, such as improved efficiencies and consumer benefits, before approving the
    transaction.
    • It is worth noting that the Competition Act, 2002 has undergone several amendments since its
    enactment, and the specific provisions and regulations governing combinations have been subject
    to change.

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