This Article is authored by Suman Kumar Jha (Founder & Managing Partner), Afnaan Siddiqui (Co-Founder & Partner), Visakha Raghuram (Associate) and Divam Garg
Introduction
Lately, the Indian entertainment and media industry has been witnessing a surge in M&A activities as companies are seeking to consolidate their positions in an increasingly virtual presence of society due to technological advancements. A key factor in this trend is the shift in consumer behavior from traditional Cable TV platforms to OTT platforms which offers more flexibility and diverse content. The recent approval by the NCLT on September 5, 2024 of the merger between Network18 Media & Investments Limited (‘Network18’) with TV18 and E18 exemplifies this drive for consolidation. This merger aims to strengthen the group’s competitive position in the evolving media industry by combining its extensive broadcasting experience with its advanced digital media capabilities. A brief overview of this merger is provided below showcasing the rationale behind consolidating these businesses into its holding listed company i.e. Network18.
The parties
- Network18 is a publicly listed company backed by Reliance Industries Limited, which houses a portfolio of digital news websites and magazines. Prior to this amalgamation, Network18 held a significant stake in both companies, with 91.89% ownership of E18 and 51.17% of TV18.
- TV18 is also a publicly listed company which is engaged in the media business and it broadcasts general news channels in Hindi, English and other regional languages and business news channels in Hindi, English and Gujarati and also broadcasts, through its subsidiary, general entertainment channels in Hindi, English and other regional languages. It also holds a 13.54% stake in Viacom18, which recently got merged with Disney’s Star India.
- E18 is a privately owned company which operated the infamous financial news platform Moneycontrol website and app.
Scheme overview
With the approval of the scheme, all the parties are now operating under one unified entity, Network18. E18 and TV18 will be dissolved without being wound up. However, it is pertinent to note that, according to the NCLT order, the parties were not required to obtain prior approval from the Ministry of Information and Broadcasting (MIB), except in the case of TV18. Due to the transfer of TV channels, TV18 was required to obtain approval from the Ministry, and as a result, the sanctioning of the scheme required this approval for the transfer of TV channels from TV18 to Network18.
The rationale behind the scheme were aimed to leverage operational synergy, cost optimization and increased revenue realization. Further, in the order the NCLT has reportedly granted the companies 30 days to submit copies of the order and the scheme to the Registrar of Companies, and 60 days to the Superintendent of Stamps for the adjudication of any applicable stamp duty.
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In conclusion, tThe merger of TV18 and E18 with Network18 is a strategic restructuring designed to strengthen the group’s position in both broadcast media and digital entertainment. By consolidating its assets and operations under a single entity, Network18 aims to engage a wider audience through its broadcasting capabilities while delivering top-tier digital media and entertainment services. This move approved by the NCLT and awaiting final clearances from the Ministry of Information and Broadcasting, enhances operational synergy and positions Network18 as a stronger competitor in the rapidly evolving media landscape.