CCI clears PVR-DT deal, with riders

The Competition Commission of India (CCI) has permitted PVR to acquire the DLF group's multiplex arm, DT Cinemas, provided it fulfils certain conditions. The deal, if executed, will strengthen PVR's leadership position in the segment.

Last June, PVR had announced the acquisition of DT Cinemas for Rs 500 crore after aborting a similar deal in February 2010.

DT Cinemas operates 39 screens in the Delhi-NCR region and CCI has allowed PVR to take possession of 32 screens only because it found the proposed entity could be a dominant player in Noida, Gurgaon and South Delhi.

PVR has agreed to not acquire any new screens for three years in Noida, as well as Gurgaon, and for five years in South Delhi.

After merger, PVR's presence will increase to 141 locations with 551 screens in 46 cities across India. The largest multiplex operator in India now has 519 screens in 133 locations. PVR will be able to add 7,939 of DT Cinemas' seats, taking its tally to 126,672.

Its closest competitor INOX operates over 420 screens, followed by Mumbai-headquartered Carnival Films with 330 screens. The latest deal in the movie screening industry reflects the trend of inorganic growth among multiplex operators. Carnival Films, a minor player in the industry till 2013, increased its screen presence by 254 when it acquired Big Cinemas last year and effectively became the third largest player in the market.

BIG BROTHER OF BIG SCREEN
What do CCI order and the deal mean for PVR?

• 551 screens in 46 cities, compared with 420 screens of INOX and 330 of Carnival Films
• PVR not to open any new screen in Noida and Gurgaon for next 3 years
• PVR not to open any new screen in South Delhi for next five years
• DT Cinemas asked to sell seven screens to any other competitor of PVR, or keep them with itself for the next five years

As part of the deal, DT Cinemas has been asked by the CCI to sell the other seven screens in South Delhi to any competitor other than PVR. DT Cinemas can also keep on operating the single screen DT Savitri in Greater Kailash-II and a multiplex in Saket that has six screens for five years, the CCI said. As a result, the deal size is likely to decrease by Rs 50-60 crore. PVR has also been asked to terminate agreements to develop multi-screen multiplexes with Garden Galleria Mall and Airia Mall, being constructed in Noida and Gurgaon, respectively.