Foodtech major Zomato has confirmed that it is in discussions with Paytm to acquire the latter’s movies and ticketing business, according to the company’s stock exchange filings. Paytm in a separate filing has also confirmed the discussions.
Confirmation from the two firms comes after reports said that Zomato was looking to acquire Paytm’s movies and ticketing vertical for about Rs 1,600-1,750 crore ($190-210 million).
“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,” Zomato said in the filing.
Zomato further said that the above-mentioned discussion is being undertaken with an intent to further strengthen its going-out business and is in line with its stated position of focusing only on the company’s four key businesses currently.
Paytm also confirmed that the talks are under consideration.
“…As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses,” said Paytm via BSE filings.
The two firms, however, clarified that any discussions currently underway are preliminary and do not involve any binding agreements.
“As such, any information pertaining to these discussions should be considered speculative at this time,” Paytm clarified in its filing.
The discussions come at a time when Paytm is reportedly laying off employees in large numbers. The company also saw its first decline in revenue in Q4 after restrictions imposed by the Reserve Bank of India due to concerns regarding compliance with regulatory norms.
As per Paytm, it should start recovering from Q2 as it is seeing stabilization or growth in consumer and merchant base metrics from April/May.
That said, if the deal goes through, Zomato will be able to further expand its offering in events business, taking on the likes of BookMyShow. Recently, the Deepinder Goyal-led company announced that it will invest Rs 100 crore ($12 million) in Zomato Entertainment, a subsidiary that controls the firm’s live events and ticketing businesses.
