Reliance Industries announced a consolidation of its media and distribution businesses spread across multiple entities into Network18.
Den Networks has surged more than 8% on this development.
Under the Scheme of Arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments. 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 and 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.
The media industry is accelerating towards being a B2C play, led both by market factors and through regulation. An integrated media play shall further increase the breadth as well as depth of the group’s consumer touchpoints, and allow for retaining a larger share of the consumer’s spend on content.
The reorganization furthers the group strategy of building a media powerhouse that is agnostic across pipes, platforms and screens. Shareholders of all the four Companies will benefit from streamlining of operations and strategy, focused management, and reduction of risk through consolidation.
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