Film exhibition companies PVR and INOX Leisure announce merger
Mumbai, March 27, 2022
Film exhibition majors PVR Limited and INOX Leisure Limited today announced a merger of the two companies that will bring together two of India's best-known cinema brands who, between them, have a network of more than 1,500 screens.
"The Board of Directors of INOX Leisure Limited and the Board of Directors of PVR Limited (PVR), at their respective meetings held today, have approved an all stock amalgamation of INOX with PVR," a press release from the two companies said.
The amalgamation is subject to approval of the shareholders of INOX and PVR, respectively, stock exchanges, SEBI and such other regulatory approvals as may be required.
Upon obtaining all approvals, when the merger becomes effective, INOX will merge with PVR. Shareholders of INOX will receive shares of PVR in exchange of shares in INOX at the approved share exchange ratio, which the release said would be three shares of PVR for 10 shares of INOX.
Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. Upon effectiveness of the scheme, the Board of Directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the Board with two board seats each.
Pavan Kumar Jain would be appointed as the Non- Executive Chairman of the Board. Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director.
Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.
The combined entity will be named as PVR INOX Limited with branding of existing screens to continue as INOX and PVR respectively. New cinemas opened post the merger will be branded as PVR INOX.
Post the merger, INOX promoters will have 16.66% stake while PVR promoters will have 10.62% stake in the combined entity.
With INOX operating 675 screens across 160 properties in 72 cities and PVR currently operating 871 screens across 181 properties in 73 cities, the combined entity will become the largest film exhibition company in India, operating 1546 screens across 341 properties across 109 cities.
"The combination would augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees," the release said.
"With consumers at the core of the decision, the merger would focus on using the strengths of both the organisations to provide an exceptional customer service and cinema experience to Indian moviegoers.
"While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets," the release said.
Siddharth Jain, Director – INOX Leisure Ltd said, “Coming together of two iconic cinema brands, which are driven by passion, is certainly the most historic moment in the Indian cinema exhibition industry. Both companies have set high service benchmarks in an endeavor to offer the best cinema experience in the world, to the most passionate moviegoers, and would continue to do so as a unified entity. As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimization opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations.”
Ajay Bijli, Chairman and Managing Director of PVR said, “This is a momentous occasion that brings together two companies with significantly complementary strengths. The partnership of these two brands will put consumer at the centre of its vision and deliver an unparalleled movie going experience to them. The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms.”