Network18 Media & Investments Ltd. announced on Wednesday (November 6) the merger of the group's TV and digital news businesses into one entity. As a part of this arrangement, TV18 and e-Eighteen.com Ltd. will merge with Network 18.
Through this move, the Network18 group aims to consolidate and expand its business in the media sector. The merger will present a unique opportunity for all shareholders to participate in the group through one listed entity, the company said in a press release.
"The proposed scheme will consolidate TV and digital news businesses of the Network 18 group in one company and will help create India's largest platform-agnostic news media powerhouse with the widest footprint across languages, straddling both TV and Digital," Network18 said in the statement.
The merged entity will comprise the TV portfolio of TV18—20 news channels in 16 languages—and the CNBCTV18.com website, along with the digital assets of Network18, which include the News18.com platform in 13 languages and Firstpost. E18 owns and operates the Moneycontrol website and app.
It creates India’s largest Integrated news media entity which will be platform-agnostic with the widest footprint across languages, straddling both TV and Digital.
Moreover, Viacom18 with its portfolio of JioCinema and 40 TV channels, will be a direct subsidiary of Network18.
Network18 will also continue its investment in the popular show booking site and application BookMyShow.
"As consumers and advertisers increasingly gravitate towards omnichannel experiences across different aspects of their lives, having a deep and integrated presence across both TV and Digital media will enable the merged entity to serve them better," Network 18 added in its statement.
"In terms of potential impact, we believe that it really made sense to get all the businesses under one umbrella. What this will do is you will be able to cross sell, you will be able to appeal to a larger set of advertisers, you will be able to bundle this entire offering around entertainment content, everything put together and even charge a sufficient fee to the customer. So I think this is a clearly very good thing in terms of revenue scale potential," said Karan Taurani , Sr VP-Research Analyst Media, Elara Capital.
The share exchange ratio is as follows: 100 shares of Network18 for every 172 shares of TV18 and 19 shares of Network18 for every 1 share of E18.
The streamlining of a two-layer listed company structure thereby presents a unique opportunity for an investor to participate in the entire media business as well as investments.
This will help eliminate holding company discount. The merged entity will be a mid-cap company with around ₹15,000 crore. of the market cap based on prevailing prices, and will lead to institutional investors and indices evaluating the entity more favorably than earlier.
The converged operations under a single entity will result in synergies in content, revenue, and costs. Will also eliminate inter-company transactions and borrowings.
It also creates headroom for any possible capital raise in the future for growth and deleveraging, as promoter holding will be around 57%, as against 75% currently.
(Edited by : Ajay Vaishnav)
First Published: Dec 6, 2023 8:04 PM IST
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Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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