NASDAQ-listed Videocon d2h to merge with Dish TV

NASDAQ-listed Videocon d2h to merge with Dish TV


  • 11 Nov 2016
NASDAQ-listed Videocon d2h to merge with Dish TV
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Within two years of taking their direct-to-home (DTH) firm, Videocon d2h Ltd, public on NASDAQ, Videocon group promoters Dhoot family have decided to merge the firm with bigger domestic rival Dish TV Ltd, to create the largest Indian listed media firm by revenues.

Essel Group controlled Dish TV is already the single-largest distributor of television service in India and as a combined force, the new entity – Dish TV Videocon Ltd, will reach one-in-six television households in the country.

In fact, combined with Essel Group’s separate cable TV firm Siti Cable, the group would reach one-in-four of 175 million TV houses. It would be slightly more dominant in the 145 million cable & satellite TV houses in India with 27% reach, far ahead of even terrestrial and state-run Doordarshan. This would also increase its heft in striking deals with content providers and TV channels.


Due to this, the proposed deal could face intense scrutiny by Competition Commission of India (CCI).

Billionaire Subhash Chandra and family who own 64.4% of Dish TV now will hold 36% stake in the combined firm and Dhoot family shall have 28% stake. However, at the close of the proposed transaction, Essel Group shall continue as promoters of Dish TV Videocon.

Last year, Videocon d2h had listed on NASDAQ through a reverse merger with American blank cheque firm. The proposed deal will delist it from NASDAQ.


The two firms said in a joint statement that Essel Group is also in discussion with Dhoot family to purchase some of their shares in Dish TV Videocon post the amalgamation, details of which are likely to be finalised soon.

Jawahar Lal Goel, chairman and managing director of Dish TV, who will continue to lead the combined firm, said: “This transaction that brings together two powerhouse brands of the cable & satellite Industry in India, will provide us with a gateway to harness growth opportunities in an ultra-competitive multi player environment.”

Saurabh Dhoot, executive chairman of Vd2h said: “Since the commercial launch of Vd2h seven years ago, we have created a highly-successful and high-growth DTH business with a solid foundation. Today we are very excited about this strategic combination to create a solid platform with decisive and proven leadership at the front that would lead Dish TV Videocon to create value for all stakeholders, our customers, employees, and our shareholders.”


Dhoot family shall have the right to nominate two directors on the Dish TV Videocon board, one of whom shall be vice chairman and the other a deputy managing director.

Formidable combination

The combined entity would be marginally bigger than Essel Group flagship Zee Entertainment Ltd as the top listed media firm by revenues with pro-forma topline of Rs 5,915.8 crore for the fiscal year ended 31 March 2016. The combined firm had operating profit of Rs 1,830 crore.


This would make it the third biggest media company in the country behind privately held Bennett Coleman & Company Ltd (BCCL) and Star India Pvt Ltd. Both these firms had net revenues ranging between Rs 6,300 crore to around Rs 7,000 crore (these numbers do not factor in their subsidiaries).

Its operating profit would be second only to BCCL, also known as Times Group. Star India reported operating loss in the year ended 31 March 2015. It is yet to file financials for 2015-16 with the Registrar of Companies.

Star India is part of 21st Century Fox Inc., a firm controlled by media moghul Rupert Murdoch. Murdoch also controls News Corp, the parent of this website.


Dish TV Videocon would combine 15.1 million net subscribers of Dish TV with 12.4 million subscribers (as on 30 September 2016) of Videocon d2h. Of this, 2.8 million are HD subscribers.

This would create by far the largest player in a fragmented TV business where each firm currently holds around 8% or less. The top DTH and cable players - Dish TV, Tata Sky, Videocon d2h, Airtel Digital TV, Hathway, Siti Cable, Sun Direct - all own between 6-8% market share each currently.


Pursuant to the amalgamation scheme, Dish TV Videocon will issue 857.791 million shares and Videocon d2h shareholders shall be allotted 2.021 new shares of the combined firm for every one share held in Videocon d2h.

After completion of the transaction, Dish TV Videocon shall continue to be listed on NSE and BSE in India and on the Luxembourg Stock Exchange in the form of GDRs.

Holders of Videocon d2h ADRs that are listed on NASDAQ will receive their new shares in the form of GDRs, unless they elect to receive and hold new shares directly.

The total number of cable & satellite households is projected to increase from 145 million to 174 million by 2020.

The transaction, which is subject to regulatory approvals, is expected to be completed in the second half of 2017.


Morgan Stanley is acting as exclusive financial advisor to Dish TV and YES Securities (India) Limited is acting as lead financial advisor to Videocon d2h. The other advisors involved in the transaction are EY, SR Batliboi & Co. LLP, Luthra & Luthra Law Offices for Dish TV, and KPMG, Shardul Amarchand Mangaldas & Co., and Edelweiss Capital for Videocon d2h.

Shearman & Sterling is acting as international legal advisor to both Dish TV and Videocon d2h in respect of the US federal securities law and related aspects of the proposed transaction.

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