Reliance Industries on Monday announced the move to consolidate its media business and distribution spread across multiple entities into a single brand, Network18. Under the plan, the Reliance’s TV18 Broadcast, Hathway Cable & Datacom and DEN Networks will merge into Network 18 Media & Investments Limited. The board of directors of the respective companies approved the scheme of amalgamation and arrangement at their meetings held on Monday. The appointed date for the merger shall be February 1, 2020, the company said. The news broadcasting business of TV18 Network will be housed in Network 18, according to the statement filed by the company in the stock exchange.
Network18 Will Be an Integrated Media and Distribution Company
TV18’s interests in 51% subsidiaries Viacom18 and AETN18, as well as IndiaCast, the 50:50 joint venture with Viacom18, are part of the consolidation, as per the statement. The cable and broadband businesses of Hathway Cable & Datacom and DEN Networks will be housed in two separate wholly-owned subsidiaries of Network18. Network18 will be an integrated media and distribution company with a revenue of Rs. 8,000 crore and will be net-debt free at the consolidated level, the statement from TV18 Network said.
This will scale up Network18 “as one of the largest listed players in the sector”, they added.
Also, the restructuring will create value chain integration and render substantial economies of scale. It will also simplify the corporate structure of the group by reducing the number of listed entities as per a statement from TV18 Network.
Hathway and DEN Networks Will Be Consolidated
In addition, the consolidation of cable businesses of DEN and Hathway in one entity will leverage the “combined strength of 27,000 local cable operator (LCO) partners who act as the touchpoints to 15 million households in India,” as per the press statement. The combined broadband entity will also serve one million wireline broadband subscribers across the country.
Besides, the shareholders of all four companies will benefit from the integration of operations and strategy, reduction of risk through consolidation. This will be done with a share change ratio.
The share exchange ratio approved by the board now gives the shareholders 92 shares of Network18 for every 100 of TV18, 78 shares of Network18 for every 100 shares of Hathway, and 191 shares of Network18 for every 100 of DEN Networks.