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OTT onslaught: India’s biggest cinema brands PVR, INOX announce merger

OTT onslaught: India’s biggest cinema brands PVR, INOX announce merger

OTT onslaught: India’s biggest cinema brands PVR, INOX announce merger
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By CNBCTV18.com Mar 27, 2022 4:16:55 PM IST (Published)

Share exchange ratio of three shares of PVR for 10 shares of INOX. Post the merger, PVR promoters will have 10.62 percent stake while INOX promoters will have 16.66 percent stake in the combined entity. PVR currently operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities.

Two of India’s biggest cinema exhibition brands – PVR and INOX Leisure – have announced they would merge their might to deliver an “unparalleled” consumer experience with a network of more than 1,500 screens. Their joint statement indicates that the onslaught of over-the-top (OTT) or streaming platforms had a role to play in the consolidation.

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The new entity would be named PVR INOX with the branding of existing screens to continue as PVR and INOX, respectively. New cinemas opened post the merger would be called PVR INOX, the companies said on Sunday in the joint statement.
“While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in tier 2 and 3 markets,” the joint statement states.
The board of directors of the companies, at their respective meetings held on March 27, approved the all-stock amalgamation of INOX with PVR. The amalgamation would be subject to the approval of the shareholders of PVR and INOX, stock exchanges, SEBI, and other regulators.
After the merger, shareholders of INOX will receive shares of PVR in exchange for shares in INOX at the approved share exchange (swap) ratio. The share exchange ratio of three shares of PVR for 10 shares of INOX has got approval from both boards.
The promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. Post the merger, PVR promoters will have 10.62 percent stake while INOX promoters will have 16.66 percent stake in the combined entity. PVR currently operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities.
After the transaction, the board of directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the board with two board seats each.
Ajay Bijli would be appointed Managing Director and Sanjeev Kumar would be appointed Executive Director. Pavan Kumar Jain would be appointed Non- Executive Chairman of the board. Siddharth Jain would be appointed Non-Executive Non-Independent Director in the combined entity.
“This is a momentous occasion. The partnership will put consumers at the centre and deliver an unparalleled movie-going experience. The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long term survival of the business and fight the onslaught of digital OTT platforms,” Bijli, chairman and MD of PVR, said.
Siddharth Jain, director of INOX, said coming together of two iconic cinema brands was the most historic moment in the Indian cinema exhibition industry.
"As we head into the industry’s revival amidst headwinds, this partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimisation opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations,” Jain said.
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