The broadcasting business will be housed under Network18, and the cable and ISP businesses will be housed in two separate wholly owned subsidiaries of Network18.

Money M&A Tuesday, February 18, 2020 - 07:13

Mukesh Ambani-led Reliance Industries announced the consolidation of its media and distribution businesses TV18 Broadcast, Hathway Cable & Datacom and Den Networks into Network18 Media & Investments.

The broadcasting business will be housed under Network18, and the cable and ISP businesses will be housed in two separate wholly owned subsidiaries of Network18.

The Appointed Date for the merger is February 1, 2020.

The restructuring will make Network 18 an integrated media and distribution company with a revenue of around Rs 8,000 crore. It will be net-debt free at consolidated level.

Network 18 currently runs several television channels and news publications such as News18, CNBC TV18, CNBC Awaaz, among others. It has entertainment channels such as Colors, MTV, VH1, Comedy Central, among others.

Reliance Industries said in a statement that the scheme of arrangement was approved by the Board of Directors of the respective companies at their meetings held on Monday.

According to RIL, the restructuring shall create value-chain integration and render substantial economies of scale, while also simplifying 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,” RIL said in a statement.

The reorganisation furthers the group strategy of building a media powerhouse that is agnostic across platforms and screens.

According to reports, after the restructuring, RIL’s holding in Network18 will reduce from 75% to around 64%.

The merger will be done through a share swap. As per the company, shareholders will get 92 shares of Network18 for every 100 shares of TV18, 78 shares of Network18 for every 100 shares of Hathway and 191 shares of Network18 for every 100 shares of Den.

RIL also said in the statement that the consolidation of the cable businesses of Den and Hathway into one entity will leverage the combined strength of the nearly 27,000 Local Cable Operators (LCO) partners who act as the touchpoints to around 15 million households in India. The combined entity will serve around 1 million wireline broadband subscribers across the country.

The Scheme of Arrangement is subject to all necessary approvals.