Indian Satellite TV operators Videocon d2h and Dish TV have decided to merge together to create a single entity. The news comes through Dish TV, which announced its plans of merging with Videocon along with the fact that it will hold the majority of shares in the combined entity.
The combined entity will be called Dish TV Videocon Ltd, and will have longtime Dish TV MD Jawahar Lal Goel as its Chairman and Managing Director. Meanwhile, the Vice Chairman and the Deputy Managing Director will be nominated by Videocon d2h.
According to Dish TV, it will have 55.4 percent stocks of the new company under its control while the remaining 44.6 percent will be held by Videocon d2h shareholders.
As far as the number of shares is concerned, Dish TV Videocon Ltd will issue a total of 857.791 million shares. Videocon d2h shareholders will receive 2.021 shares of the firm for each and every share they originally held in Videocon d2h.
Along with a combined subscriber base of 27.6 million, the entity is also expected to generate a a massive revenue to the tune 59.16 billion rupees — or around $879.11 million. The merged entity will also have a combined net debt of around Rs 2,161 crore.
Speaking on the topic, Saurabh Dhoot, executive chairman of Vd2h, said:
The Videocon group has extensive distribution and service expertise, with set-top box sourcing and manufacturing advantages. Dish TV has extensive media experience and content sourcing. Clearly, a DTH platform catering to 25-30 million subscribers could have big scale benefits. The merger would enhance our ability to grow alternate revenue streams such as carriage, advertising, value-add services and new channel launches
Dish TV’s move appears to have come in face of increasing competition from private operators. Gone are the days when the satellite television market was the sole domain of a single player. Today, there are over half a dozen operators in the country, including the likes of Airtel Digital TV, Tata Sky, and Reliance Big TV.
Amidst this competitive landscape, an entity formed with the consolidation of Videocon and Dish,will have a better chance of survival and growth. The combined entity will also be the single largest cable and satellite TV operator across the country.
Dish TV also hopes to tap into the emerging Satellite TV market. The company predicts that the number of subscribers will grow up to 200 million, from the present 145 million or so.
The companies hope to conclude the merger by the second half of 2017.