Reliance to merge media and distribution businesses into Network18

Mukesh Ambani-led Reliance Industries has announced a consolidation of its media and distribution businesses spread across multiple entities into Network18.

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 will be February 1. The board of directors at respective companies have approved the scheme of amalgamation and arrangement, according to a statement issued by Reliance Industries.

The broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly-owned subsidiaries of Network18.

"The restructuring will create value-chain integration and render substantial economies of scale. The scheme will also simplify the corporate structure of the group by reducing the number of listed entities," said the statement.

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 will boost efficiency and exploit synergies, creating value for all stakeholders, it added.

Reliance said the media industry is accelerating towards being a B2C play, led both by market factors and through regulation. An integrated media play will 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 reorganisation furthers the group strategy of building a media powerhouse that is agnostic across pipes, platforms and screens, it said. Shareholders of all the four companies will benefit from streamlining of operations and strategy, focused management and reduction of risk through consolidation.

Network18 will be an integrated media and distribution company with a revenue of Rs 8,000 crore and scale-up as one of the largest listed players in the sector. It will be net-debt free at a consolidated level, providing a solid base for growth as well as improved shareholder returns.

The company will benefit from a balanced mix of cyclical and annuity revenues to unlock growth while ensuring stability besides creating eco-system for growth opportunities in digital, broadcast media, cable and broadband.On the other hand, said Reliance, the consolidation of cable businesses of Den and Hathway in one entity will leverage the combined strength of 27,000 local cable operator partners who act as the touchpoints to 15 million households in India, delivering localised, people-friendly and ultra-fast customer services.

The combined broadband entity will serve one million wireline broadband subscribers across the country. Reliance's holding in Network18 will reduce from 75 per cent to 64 per cent upon implementation of the scheme.