Homeshop18, subsidiary of Mukesh Ambani-owned Network18 Media and Investments and Shop CJ Network today said they will be merging the businesses of both entities.
"The Board of Directors of TV18 Home Shopping Network (Homeshop18) and Shop CJ Network approved entering into a definitive agreement to combine the businesses of both entities," Network18 said in a statement.
The merger shall be effected by way of a share-swap and the shareholders of Shop CJ shall be issued 25 per cent equity in HomeShop18, making Shop CJ a subsidiary of HomeShop18.
Post the transaction, HomeShop18 shall cease to be a subsidiary of Network18 Media & Investments, however, Network18 shall continue to be the largest shareholder in the combined entity.
"The resultant benefits of scale shall better the growth prospects for the combined entity, allowing it to improve its standing in the TV home-shopping landscape and compete better with the challenge from e-commerce players," it said.
"We believe multiple synergies with respect to sourcing, marketing and delivery can be exploited through a combination with Shop CJ, which shall further accelerate this process," it added.
HomeShop18 is a subsidiary of Network18 Media & Investments, with SAIF Partners, GS Home Shopping South Korea and OCP as co-investors, while Shop CJ is an equal joint venture between the South Korean home shopping major CJO Shopping and P5 Asia Holding Investments (Mauritius) belonging to the Providence Equity Partners group.
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