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Multiplex operators PVR and INOX Leisure on Tuesday said that they have received clearances for their merger from bourses NSE and BSE. In March, PVR and Inox Leisure announced the merger to create the largest multiplex chain in the country. 

"The company has received observation letter with 'no adverse observations' dated June 20, 2022 from BSE Ltd and observation letter with 'no objection' dated June 21, 2022 from National Stock Exchange of India Ltd respectively in relation to the scheme of amalgamation," said PVR in an exchange filing. This was also confirmed by INOX through an identical regulatory filing.

A 'no objection' certificate from the exchange is a mandatory step for getting clearance from the National Company Law Tribunal and other regulatory authorities for any scheme of amalgamation.

On March 27 this year, PVR and INOX Leisure announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens to unlock the opportunities in tier III, IV & V cities, besides in the developed markets.

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, the companies had said on March 27.

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.

Post merger, promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. PVR promoters will have a 10.62 per cent stake while INOX promoters will have a 16.66 per cent stake in the combined entity, it added.

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. The combined entity would result in material revenue & cost synergies by improving bargaining power with film distributors, real estate developers, ad-networks and ticket aggregators, as per analysts.

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