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ELP, SAM win CCI nod for PVR-DT cinemas merger, after 9 months of filings showing 'commitment' to competition

Economic Laws Practice (ELP) and Shardul Amarchand Mangaldas won approval for multiplex chain PVR, from the Competition Commission of India (CCI), to acquire DT Cinemas, nine months after PVR had filed for the CCI’s approval. It usually takes 60-90 days for the CCI’s nod to come through on mergers and acquisitions.

ELP Mumbai partner Suhail Naithani, associate partner Ravisekhar Nair, senior associate Gauri Chhabra and associates Krushika Nayan Choudhary and Aakarsh Narula, and SAM Delhi partners Naval Chopra, Shweta Shroff Chopra and regional managing partner Pallavi Shroff acted for PVR

PVR has won the CCI’s approval after a protracted process of investigation because the CCI was of the initial opinion that the proposed merged entity of PVR and DT cinemas will have an adverse effect on competition in the multiplex theatre business in certain regions of Delhi NCR and in Chandigarh.

The CCI stated in its order: >“[…] the Commission was of the prima facie opinion that the Proposed Combination is likely to cause appreciable adverse effect on competition (“AAEC”) in the relevant markets for exhibition of films in multiplex theatres in (a) New Gurgaon3; (b) South Delhi; (c) North, West and Central Delhi; (d) NOIDA; and (e) Chandigarh and directed that a show-cause notice be issued to the Acquirer in terms of subsection (1) of Section 29 of the Act. Accordingly, a show cause notice was issued to the Acquirer on 9th October, 2015 (“SCN”) wherein the Acquirer was directed to show cause, in writing, within thirty days of the receipt of the SCN, as to why investigation in respect of the Proposed Combination should not be conducted.”PVR now won the nod after submitting a revised filing in which, according to the CCI’s order, it “committed to competitive outcomes through a combination of behaviourial and structural remedies”.

ELP stated in its press release: >“PVR Limited (“PVR”) had filed a notification form on 8 July 2015 with the Hon’ble Competition Commission of India (“Hon’ble Commission”) in relation to the acquisition of an undertaking of DLF Utilities Limited (“DUL”) which houses the business of film exhibition (“DT Cinemas”). On 9 October 2015, PVR received a show cause notice from the Hon’ble Commission (“SCN”) requiring PVR to present its response as to why a detailed investigation into the matter should not be conducted. Following PVR’s response which contained certain remedies, the CCI issued directions, inviting public comments on the transaction and ordered further investigation into the matter (initiated the matter to Phase II). In early 2016, PVR appeared before the CCI to put forward its case and placed before the CCI a revised remedies package which incorporated an amalgamation of structural and behavioural remedies.”

CCI order

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