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June 17, 2024

Zomato and Paytm Engage in Acquisition Talks for Movie and Events Business

Zomato, the food delivery giant, and fintech leader Paytm have confirmed ongoing discussions for a potential acquisition of Paytm’s movie and event ticketing business. Both companies disclosed this development in regulatory filings on Monday, highlighting the preliminary nature of the talks.

In its statement, Zomato acknowledged the discussions but emphasized that no binding decisions have been made that would require board approval or public disclosure under current laws. “We acknowledge that we are in discussions with Paytm for the aforementioned transaction; however, no binding decision has been taken at this stage that would warrant board approval and subsequent disclosure in accordance with applicable law,” Zomato stated.

Zomato added that the discussions aim to enhance its “going-out business” and align with its strategic focus on four key business areas. This move is consistent with Zomato’s strategy to concentrate its efforts and resources on specific business verticals to maximize growth and profitability.

While neither Zomato nor Paytm provided details on the transaction’s valuation, industry estimates suggest the deal could be valued between Rs 1,600 crore and Rs 2,000 crore. If finalized, this acquisition would be Zomato’s second-largest purchase following its acquisition of Blinkit in 2022 for $569 million in an all-stock deal, as reported by Business Standard.

Paytm also confirmed the ongoing discussions in its corporate filing, stating that the company regularly explores strategic opportunities to enhance shareholder value. “The company routinely explores various strategic opportunities aimed at enhancing shareholder value. The potential transfer of Paytm’s entertainment business, a component of our marketing services, is one opportunity under consideration,” Paytm’s filing noted.

The fintech major emphasized that the discussions are still in the preliminary stages and do not involve any binding agreements requiring regulatory approval or disclosure under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. “Any discussions currently underway are preliminary and do not involve any binding agreements that require approval or disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, or other applicable laws. As such, any information pertaining to these discussions should be considered speculative at this time,” the statement read.

This potential deal comes as Paytm, under the leadership of Vijay Shekhar Sharma, is focusing on regaining market share by doubling down on its core payments and financial services. The company aims to scale its larger businesses to achieve profitability. Paytm’s strategic shift includes prioritizing payment services and financial products, while streamlining its operations to support merchants’ growth.

For Zomato, the acquisition aligns with its strategy to expand its investments in the “going-out” sector. Last week, Zomato announced a Rs 100 crore investment in Zomato Entertainment, which focuses on live events and ticketing. This potential acquisition of Paytm’s entertainment business would further bolster Zomato’s position in the event and ticketing market, complementing its existing food delivery and dining out services.

The unfolding talks between Zomato and Paytm reflect a broader trend in the tech and fintech industries, where companies are increasingly looking to streamline their operations and focus on core business areas while exploring strategic acquisitions to drive growth and enhance shareholder value.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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