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Business News/ Companies / News/  PVR, INOX announce merger; Ajay Bijli appointed MD, Sanjeev Kumar Executive Director
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PVR, INOX announce merger; Ajay Bijli appointed MD, Sanjeev Kumar Executive Director

The merger will be carried in a share exchange (“swap”) ratio where 3 equity shares of PVR will be swapped for 10 shares of INOX. Post the merger, promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR.

The merger will bring together two of India’s best cinema brands to deliver an unparalleled consumer experience with a network of more than 1500 screens. (Mint)Premium
The merger will bring together two of India’s best cinema brands to deliver an unparalleled consumer experience with a network of more than 1500 screens. (Mint)

Two major movie theatre chain companies, PVR and Inox Leisure on Sunday received board of directors approval for stock amalgamation of Inox with PVR. The merger will be carried in a share exchange (“swap") ratio where 3 equity shares of PVR will be swapped for 10 equity shares of INOX. The amalgamation will bring together two of India’s best cinema brands to deliver an unparalleled consumer experience with a network of more than 1500 screens.

Post the merger, 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 2 board seats each.

Under the amalgamation agreement, Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar will take charge as the Executive Director. Pavan Kumar Jain to take the role as the Non- Executive Chairman of the Board. Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.

The combined entity will be named PVR INOX Limited with the branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX.

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 center 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 “

After the merger, PVR promoters will have a 10.62% stake while INOX promoters will have a 16.66% stake in the combined entity.

The merger will strengthen the duo's presence in India. The combined entity will become the largest film exhibition company in the country operating 1546 screens across 341 properties across 109 cities. Currently, PVR operates 871 screens across 181 properties in 73 cities and INOX operates 675 screens across 160 properties in 72 cities.

Further, in a statement, PVR highlighted that 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.

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 endeavour 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."

Also, the merger will focus on using the strengths of both the organisations to provide exceptional customer service and cinema experience to Indian moviegoers.

Amidst strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, PVR stated that the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets.

For merger, SSPA & Co, Chartered Accountants, and Drushti Desai, Registered Valuer, Partner at Bansi S. Mehta & Co., the Independent Valuers appointed by PVR and INOX respectively, recommended a share exchange ratio, which has been accepted by the respective Boards.

Meanwhile, Axis Capital Limited provided a Fairness Opinion to PVR on the share exchange ratio while Ernst & Young Merchant Banking Services LLP provided the Fairness Opinion to INOX. Accordingly, INOX shareholders will receive 3 shares in PVR for 10 shares of INOX.

EY is the exclusive financial advisor on the transaction.

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Published: 27 Mar 2022, 04:07 PM IST
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