Indian satellite TV giants Dish TV and Videocon d2h are to merge, creating a new leader in the direct-to-home broadcast sector. The new company called Dish TV Videocon will have 27.6 million net subscribers.
Backed by US entertainment veterans Jeff Sagansky and Harry Sloan, NASDAQ-listed Videocon d2h will issue new shares for Bombay Stock Exchange-listed Dish TV. That will give Dish TV’s investors 55% of the enlarged new company.
Dish further expects to buy up more shares from Videocon d2h, though there are no details of that supplementary transaction. The deal is subject to multiple regulatory clearances.
Jawahar Lal Goel, chairman and MD of Dish TV will head the new entity and keep his job titles. Videocon d2h principals will have nominate two directors including the company’s vice chairman.
The companies said that the merger would create better synergies and growth opportunities. Combined revenues would be $890 million (INR59.2 billion) and EBITDA would be $275 million (INR18.3 billion.)
“We are pleased to announce this combination at a time when the cable & satellite Industry in India is rapidly progressing on the path to digitization. This transaction, that brings together two powerhouse brands of the cable & satellite will provide us with a gateway to harness growth opportunities in an ultra competitive multi player environment,” said Lal Goel in a statement.
India recently boasted as many as six DTH platforms as well as myriad cable delivery systems, with the landscape being reshaped by enforced conversion to digital. Videocon d2h was the last satellite platform to launch and grew quickly to become second or third largest in the market, putting it in a position to be involved in the widely anticipated process of consolidation.
That process may have been accelerated by the recent launch of Reliance Jio, a nationwide cellular phones and data platform backed by India’s richest businessman Mukesh Ambani. With free or low cost calls and low cost data, Reliance Jio is expected to rapidly change – and enlarge – India’s phones and Internet environment. Even after the merger, the new Dish TV Videocon would hold only a 16% share of India’s 175 million TV households.