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PVR and Inox Leisure have announced the merger to create the largest multiplex chain in the country. The combined entity will be named PVR INOX Ltd 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.

“We believe PVR and Inox merger is a win-win situation as it would lend invincible size advantage to the combined entity (pre-COVID screen/BO market share of ~46%/30% respectively) and result in material revenue & cost synergies by improving bargaining power with film distributors, real estate developers, ad-networks and ticket aggregators," said brokerage Prabhudas Lilladher.

PVR and Inox merger will create a multiplex behemoth with a network of 1,500+ screens across India. As per the agreement, the swap ratio is 3:10 i.e., 3 shares of PVR for 10 shares of Inox. Post-merger, the board will be reconstituted and will have 10 members. Both promoter families will have equal representation on board with 2 seats each.

“The merger between Inox and PVR is a win-win situation for both companies however this merger needs to get final approval from CCI. PVR is a bigger player and it has diversified geographies that will help Inox to grow further. PVR has a debt issue while Inox leisure is a cash-rich company therefore the combined entity will have a better balance sheet. Stock prices of both companies have already rallied, therefore there is a risk of profit booking on news but the long term outlook is bullish," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

 

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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