Reliance Industries announced a consolidation of its Media & Distribution businesses spread across multiple entities into Network18.
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India’s largest private sector company by market value said that, as a result, Network 18, one of India’s largest listed media companies, will become an entity with about Rs 8,000 crore in annual revenue and benefit from substantial economies of scale.
Under the Scheme of Arrangement, TV18 Broadcast (NSE: TV18), Hathway Cable & Datacom (NSE: HATHWAY) and Den Networks (NSE: DEN) will merge into Network18 Media & Investments (NSE: NETWORK18).
The Appointed Date for the merger shall be February 1, 2020. The Board of Directors of the respective companies approved the Scheme of Amalgamation and Arrangement at their meetings held today.
The Broadcasting business will be housed in Network18 and the Cable & ISP businesses in two separate wholly owned subsidiaries of Network18.
The restructuring shall create value-chain integration, and render substantial economies of scale.
The Scheme shall also simplify the corporate structure of the group by reducing the number of listed entities.
“The aggregation of a content powerhouse across news and entertainment (both linear and digital) and the country’s largest cable distribution network under the same umbrella shall boost efficiency and exploit synergies, creating value for all stakeholders,” Reliance stated after the boards of TV18 Broadcast, Hathway Cable & Datacom, Den Networks and Network18 Media & Investments met to approve the consolidation.
For every 100 shares they own, shareholders of TV18 Broadcast will receive 92 shares of Network 18. Hathway shareholders will get 78 shares of Network18 and Den shareholders 191 shares of Network18.
TV18 Broadcast owns the largest news network in the country under the News18 brand and is also the majority shareholder in the entity which owns the Colors network of entertainment channels and video streaming service Voot. Together Hathway & Den are India’s top cable platform, controlling 30% of the market.
Network 18 would be the largest listed media company by revenue for the first nine months of the 2019-20 financial year, edging out Zee Entertainment and the Sun TV network.
The Reliance Group’s holding in Network18 will reduce from 75 percent to 64 percent once the merger is completed.
Appointed Date: February 1, 2020
Share exchange ratio:
92 shares of Network18 for every 100 shares of TV18.
78 shares of Network18 for every 100 shares of Hathway.
191 shares of Network18 for every 100 shares of Den.