Leading film exhibition players PVR Ltd and INOX Leisure Ltd on Sunday announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens.
The respective board of directors of the two companies at their meetings held on Sunday have approved an all-stock amalgamation of INOX with PVR, the two companies said in separate regulatory filings.
The combined entity will be named PVR Inox Ltd with the branding of existing screens to continue as PVR and INOX. New cinemas opened post the merger will be branded as PVR Inox, they added.
As per the agreement, INOX will merge with PVR in a share swap ratio of 3 shares of PVR for every 10 shares of INOX.
“The amalgamation is subject to the approval of the shareholders of PVR and INOX, respectively, stock exchanges, the SEBI and such other regulatory approvals as may be required.”
"Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR," the filing said.
PVR Promoters will have a 10.62% stake, while INOX promoters will have 16.66% stake in the combined entity, it added.
Board to be reconstituted
When the merger comes into effect, the board of the merged company would be reconstituted with total strength of 10 members and both the promoter families having equal representation on the board with two seats each.
The merger will unlock significant complementarity and growth potential and offers compelling revenue and cost synergies, the statement added.
PVR's Ajay Bijli will be appointed the Managing Director and Sanjeev Kumar will be appointed the Executive Director of the merged entity.
While INOX's Pavan Kumar Jain will be appointed the Non-Executive Chairman of the Board and Siddharth Jain will be appointed the Non-Executive Non-Independent Director in the combined entity.
PVR Chairman and Managing Director Mr. Ajay Bijli said: ”The partnership of these two brands will put consumers 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".
INOX Leisure Director Mr. Siddharth Jain said: ”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 optimisation opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations". PVR currently operates 871 screens across 181 properties in 73 cities, while INOX operates 675 screens across 160 properties in 72 cities.
"The combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties in 109 cities,” the filings said.