Zomato in talks to acquire Paytm's entertainment vertical
The food delivery unicorn said it has undertaken discussions with an intent to strengthen its going-out business.
Food delivery unicorn is in discussions with to acquire its movies and ticketing business.
"The above discussion is being undertaken with an intent to further strengthen our going-out business and is in line with our stated position of focusing only on our four key businesses currently," Zomato said in a regulatory filing.
Zomato said it has made this voluntary disclosure in response to news articles on the subject.
"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 a board approval and subsequent disclosure
in accordance with applicable law," it said.
Meanwhile, Paytm's parent One97 Communications, said in a statement. "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."
The company also clarified that discussions currently underway are "preliminary" and "do not involve any binding agreements."
If the deal is completed, it would value Paytm's movie and ticketing vertical at Rs 1,500 crore, The Economic Times reported, citing sources.
If the deal goes through, it would be Zomato's second-largest acquisition, after Blinkit, which was acquired for nearly half a billion dollars in 2022.
Last month Paytm, which is led by Vijay Shekhar Sharma, reported its first sales decline on record.
In the January-March quarter, Paytm's losses soared over three-fold year on year to Rs 550 crore, while Q4 revenues dipped 2.8% YoY to Rs 2,267 crore.
Due to regulatory sanctions from the Reserve Bank of India, the fintech player had to stop all operations at its subsidiary Paytm Payments Bank Ltd, which led to impairment losses of Rs 227 crore.
The company said it would trim non-core assets and cut jobs to deal with the fallout of the regulatory action on Paytm Payments Bank Ltd.
Edited by Swetha Kannan