Satellite TV operators Dish and Videocon d2h to merge
11 November 2016
Satellite TV operators Dish TV India Ltd and Videocon d2h Ltd today announced a merger of the two to create a new company with net subscribers of 27.6 million, strengthening its position in the country's vast direct-to-home (DTH) market.
The board of directors of Dish TV and Videocon d2h Limited approved a scheme of arrangement for the amalgamation of Vd2h into Dish TV (the ''Scheme'') and the execution of definitive agreements in relation to such amalgamation (the ''Proposed Transaction''), Dish TV stated in a release.
Under the scheme, Dish TV Videocon will issue 857.791 million shares as consideration for the scheme and the Vd2h shareholders will 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 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.
Following the closing of the proposed transaction, the merged entity will be renamed as Dish TV Videocon Limited (Dish TV Videocon), the release added.
The combined entity will have a revenue of about Rs5,916 crore ($879.11 million), according to Dish TV.
Following the merger, Dish shareholders will own 55.4 per cent of the new company, with the remaining stake going to Videocon shareholders, it added.
Dish, the first DTH operator in India, said the combined entity will have Jawahar Lal Goel as chairman and managing director.
Jawahar Lal Goel, chairman and managing director of Dish TV said, ''We are pleased to announce this combination at a time when the cable and satellite Industry in India is rapidly progressing on the path to digitisation. This transaction, that brings together two powerhouse brands of the cable and 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.''
Saurabh Dhoot, executive chairman of Vd2h 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.''
India has an estimated 145 million households with cable and satellite television, but Dish is betting this will grow to 200 million in the next three years.
The DTH provider industry, while small, has been growing fast and is becoming increasingly competitive. It now has at least seven operators, including the privately-held Airtel Digital TV, Tata Sky, and Reliance Big TV.
The current promoters of Dish will continue as promoters of the combined firm after the deal closes, which is expected to happen in the second half of 2017, subject to regulatory approvals.
The combined company will also seek a global depository receipt listing on the Luxembourg exchange, Dish said.