Shanghai Media Group, a Chinese state-controlled conglomerate, has merged two of its listed subsidiaries to form a new group, that it claims will be the largest Internet media conglomerate in China.

SMG is one of largest media and entertainment conglomerates in China and last week announced an expansion of its relationship with Disney.

SMG is merging Internet TV service operator BesTV New Media and Shanghai Oriental Pearl.

Shares in the new BesTV entity began trading Monday on the Shanghai stock exchange.

The merger process will also involve the absorbtion of a handful of unlisted SMG subsidiaries, including SMG Pictures, Oriental CJ Home-shopping, Wings Media and Shanghai Interactive TV.

BesTV expects to raise additional capital of up to $1.63 billion (RMB10 billion) through a private share placing, with half of the proceeds going into expansion of its Internet-based TV businesses.

In March, SMG was merged with its parent company Shanghai Media & Entertainment Group (SMEG) acquiring Shanghai Oriental Pearl under SMEG. The move paved the way for the listing of the new BesTV stock. Shares of BesTV and Oriental Pearl have been suspended since May.

Upon completion of the merger, net asset value of the new BesTV company will be $2.07 billion (RMB 12.7 billion). Revenue is expected to hit RMB 16 billion and net profit be RMB 2.5 billion in 2014.

The company said that the move is partly a response to Chinese President Xi Jinping’s call for the establishment of several new-style media groups.

SMG has a portfolio of media and related businesses including news, media networks, OTT and streaming, live entertainment, tourism, home shopping, IP distribution and cultural investments.