- Mukesh Ambani is restructuring his media & distribution operations of RIL by merging 3 of them with flagship Network18 Media & Investments.
- Television 18 Broadcast, Hathway Cable & Datacom & Den Networks will fall under the same umbrella brand – Network 18 Media & Investments.
After a round of acquisitions and purchases done by Ambanis, it’s high time for the conglomerate to assemble things in such a way that looks less than messed up and more than a sorted and well-designed portfolio.
The entire broadcasting, media & distribution business of RIL will be housed under Network18. Cable and ISP businesses will be in 2 separate wholly-owned subsidiaries of Network18.
Why is The Media & Distribution Business of RIL Is Merging?
The merger will be executed through a share swap. After the restructuring is done, RIL’s holding in Network18 will be 64% (from 75% previously).
Post-merger process media & distribution business of RIL will create a media entity with interests in news, entertainment, internet, ISP and cable business which will be directly competing with Zee Group, Sun TV Network, and various other media houses.
The board of respective companies approved the scheme of amalgamation and arrangement at a meeting held on Monday.
Merging of media & distribution business of RIL 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. – Network18 said in a statement.
Consolidation of TV business under Network18 will create an integrated media and distribution company with a revenue crossing ₹8000 crores making one of the largest contenders in the market.
As per the scheme of the arrangement, shareholders will receive 92 shares of Network18 for every 100 stares of TV18, 78 shares of Network18 for every 100 shares of Hathway and 191 shares of Network18 for every 100 shares of Den.
Talking About Ambani’s Media Business:
Network18 is 75% owner by Independent Media Trust – RIL is its sole beneficiary. For now, Network18 owns 51% in TV 18 which further owns 51% in Viacom 18 through a joint venture with Viacom.
Sony is in rounds of negotiations with RIL to merge its entertainment business to create a larger general entertainment category. Talking about its existing channels, Colors, MTV and Nickelodeon and others along with the VOOT app.
The market capitalization of Network 18 is ₹2999.51 crores while TV18 stands at ₹4,311.63 crores. Are Hathway’s market cap is ₹3407.45 crores and Den’s market cap being ₹2581.78 crores.
Just imagine (and calculate) what will the market-cap when media & distribution of RIL will be merged with Network18!
“The reorganization furthers the group strategy of building a media powerhouse that is agnostic across pipes, platforms, and screens. The aggregation of a content powerhouse across news and entertainment and the country’s largest cable distribution network under the same umbrella shall boost efficiency and exploit synergies, creating value for all stakeholders” – Network18 said in a report.
Doubting Ambani’s is more like doubting our own doubts if they are worth expressing! After a round of investments, acquisitions and purchases, Reliance industries are now making the company look beautiful, sorted and easy to understand their behemoth portfolio.
With merging of media & business of RIL will my (or may not be) fruitful for the investors, we’ll have to wait for that. But for now, Ambanis are trying their best to make their portfolio of companies look easily understandable and trying to arrange their feathers for another high fly.