According to the Competition Commission, the deal, which would create an entity with a combined turnover of over Rs 1,800 crore, is "not likely to have appreciable adverse effect on competition in India".

The multi-layered deal includes the infusion of Rs 120 crore by Reliance MediaWorks in Prime Focus for a 30.2 percent stake-buy, while existing promoters of Prime Focus would also pump in a similar amount.

In an order dated December 8 and made public on Monday, the Competition Commission of India (CCI) observed that both the firms "provide film and media services and have horizontal overlaps" in segments like VFX services, post-production services and equipment rental services.
Clearing the deal, CCI noted that "the combined market shares of the parties are less than 10 percent in each of VFX and post-production services.
"Further, in equipment rental services, their composite market share is less than 12 percent, which is also not significant".
The regulator also ruled out anti-competitive concerns on the basis that there were many players in these segments. Under the proposed combination Prime Focus would acquire all the fixed assets, current assets and current liabilities of the film and media division of Reliance MediaWorks.
These include state-of-the-art studio facility in Film City Mumbai, media back end facility in SEZ at Navi Mumbai, 100 percent ownership of Los Angeles-based digital film restoration firm Lowry Digital and debt of Rs 200 crores.

Further, Reliance Mediaworks would purchase around 30.24 percent stake in Prime Focus and additionally acquire 7.72 percent shareholding in the company by the promoters, through Monsoon Studio Private Ltd -- a company wholly owned by them -- by way of a preferential allotment for cash.

Besides, an open offer would also be made to acquire up to 26 percent of the equity share capital of Prime Focus. The deal was announced on July 2 this year, following which the parties had approached the fair trade regulator in August.

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