The repeated rumours that India’s Videocon d2h pay-TV operation was planning a merger were true. Videocon d2h will “amalgamate” with Essel Group’s Dish TV.
A statement says that “the board of directors of both the companies have approved a scheme of arrangement for the amalgamation of Videocon d2h into Dish TV and the execution of definitive agreements in relation to such amalgamation.”
The formal statement says that Videocon d2h will issue 857.791 million shares as consideration for the Scheme. The Videocon d2h shareholders shall be allotted 2.021 new shares of Dish TV Videocon for every one share held in Vd2h (subject to certain adjustments as set out in the official Scheme), which would result in Dish TV shareholders owning 1,066.861 million existing shares or 55.4 per cent of Dish TV Videocon, and Vd2h shareholders owning 857.791 million new shares or 44.6 per cent of Dish TV Videocon.
The end result will trade as Dish TV Videocon, and will be India’s largest DTH operator with some 27.6 million subscribers.
Dish TV CMD Jawahar Goel said, “We are pleased to announce this combination at a time when the cable & satellite Industry in India is rapidly progressing on the path to digitization. This transaction, that brings together two powerhouse brands of the cable & satellite Industry in India, will provide us with a gateway to harness growth opportunities in an ultra-competitive multi player environment. This combine will enhance value for all stakeholders – Consumers, Government, Employees and Shareholders. Dish TV has been a pioneering and path breaking company which has taken the pain and responsibility of establishing many new processes, like the electronic & digital payments system that were the business need of the initial years and went on to become the industry norm of a dynamic and throbbing Industry. Now we take the next leap in our very exciting and exhilarating journey.”
Videocon d2h’s Executive Chairman Saurabh Dhoot said, “Since the commercial launch of Vd2h seven years ago, we have created a highly successful and high-growth DTH business with a solid foundation. We went public on the NASDAQ with a vision to take the company to the next level and emerge as a leading, innovative and highly profitable Indian media platform. Today we are very excited about this strategic combination to create a solid platform with decisive and proven leadership at the front would lead Dish TV Videocon to create value for all stakeholders, our customers, employees, and our shareholders.”
When the deal closes the business will continue with its Bombay Stock Exchange listing, as well as that on the Luxembourg exchange.
Videocon d2h was listed on the Nasdaq exchange when Harry Evans Sloan and Jeff Sagansky paid $273 million for a 38.4 per cent stake in the business back in April 2015, using their Silver Eagle Acquisition Corp. The formal statement added: “At the close of the proposed transaction, the current promoters of Dish TV shall continue as promoters of Dish TV Videocon. The Dish TV principals are also in discussion with the Videocon d2h principals to purchase some of the Videocon d2h principals’ shares in Dish TV Videocon post the amalgamation, details of which are likely to be finalised soon.
The deal is subject to regulatory approval.