Homeshop18, Shop CJ agree to merge
New Delhi: E-commerce company Homeshop18 on Thursday entered into an agreement with home shopping network Shop CJ Network Pvt. Ltd to combine the businesses of both entities.
Homeshop18 is a subsidiary of Network18 Media & Investments, with SAIF Partners, GS Home Shopping South Korea and OCP as co-investors. Shop CJ is an equal joint venture between South Korean home shopping company CJO Shopping Co. Ltd and P5 Asia Holding Investments (Mauritius) Ltd from the Providence Equity Partners group.
“The transaction is aimed at uniting two of India’s top home-shopping players, to create the largest home-shopping platform in the country. 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,” the company said in a statement.
Under the deal, shareholders of Shop CJ will be issued 25% equity in HomeShop18, making Shop CJ a subsidiary of HomeShop18. Post the transaction, HomeShop18 will cease to be a subsidiary of Network18 Media & Investments Ltd; however, Network18 shall continue to be the largest shareholder in the combined entity.
“HomeShop18 has optimized its operations substantially since the challenges faced in the last year. 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,” the company further added.
Homeshop18 raised an undisclosed sum in its last round of funding in July 2016. Before that, in April 2013, the company had raised $30 million (around Rs163 crore) from hedge fund OCP Asia, and Network18. OCP and Network18 contributed $15 million each.
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