Markets: Food delivery company Zomato has confirmed it is in talks with Paytm to acquire Paytm’s movies and events business.

In a regulatory filing, Zomato addressed media reports about the potential acquisition, stating: “We acknowledge that we are in discussions with Paytm for the aforementioned transaction. However, no binding decision has been made at this stage that would require Board approval and disclosure in accordance with applicable law.” Zomato emphasized that the discussions aim to strengthen its ‘going-out’ business, aligning with its focus on four key business areas.

Paytm, in a separate filing, also confirmed ongoing discussions but did not mention Zomato specifically. Paytm indicated that the potential transfer of its entertainment business, part of its marketing services, is being considered. The company is focusing on payment and financial services and digital goods commerce, noting that discussions are preliminary and non-binding.

Media reports suggest this strategic move fits with Zomato’s plans to enhance its ‘going out’ offerings. Bloomberg reported that Paytm is negotiating with Zomato to divest its movie and events ticketing division as part of a strategic overhaul due to declining sales. The potential deal could value Paytm’s movies and events business at around ₹1,500 crore.

If the deal goes through, it would be Zomato’s second-largest acquisition after its 2021 purchase of the quick commerce platform Blinkit (formerly Grofers) in an all-stock deal worth ₹4,447 crore. Zomato is also planning to inject an additional ₹300 crore into Blinkit, bringing its total investment in the subsidiary to over ₹2,300 crore.

The stock market’s reaction to this news may unfold on Tuesday, as Indian equity markets are closed on Monday due to a holiday. On Friday, Zomato’s stock ended 0.7 percent higher at ₹186.19, having gained around 50 percent in 2024 so far.