Demystifying the Dish TV-Videocon merger deal

[Umair Malik]

MUMBAI:-The merger of Videocon d2h with Dish TV will create a TV distribution behemoth, commanding a market share of over 45% in the direct-to-home (DTH) space. Here is what you need to know about the deal:

1. Dish TV shareholders will own 55.4% of the enlarged new company. The remaining 44.6% stake in the merged entity will be with the Videocon d2h investors.

2. The Dish TV promoter holding will be 36%. Vd2h promoters will have 28%. The remaining 36% will be with the public.

3. There is an almost 34% premium to the indicative market cap of Vd2h’s Nasdaq-listed ADRs, analysts said. Dish TV indicated that the valuation was fair.

4. Size is the most attractive part of the deal. The combined subscriber base is 27.6 million, as of 30 September 2016. The merged entity becomes the second largest DTH company in the world by subscribers, behind DirecTV (37.8 mn). Out of the total 175 million TV households in India, the merged entity will have a 16% share.

5. The merged entity, named Dish TV Videocon, will become a leading media company by sales. Combined revenue of Rs 5,920 crore (Rs 59.20 billion) in FY16 is higher than Zee Entertainment’s sales of Rs 5,850 crore.

6. Combined EBITDA is Rs 18,262, as of 31 March 2016. EBITDA margin is 31%.

7. Subscriber market share will be 45%, almost double the size of Tata Sky. The other private DTH operators are Airtel Digital TV, Sun Direct and Reliance Digital TV. Pubcaster Prasar Bharati runs subscription-free DTH service called Freedish.

8. The operational brands will continue – dishtv, Zing and Videocon d2h.

9. Dish TV Videocon will be led by Jawahar Goel as chairman and managing director. Saurabh Dhoot will be the deputy managing director.

10. The Vd2h principals shall have the right to nominate two directors on the Dish TV Videocon board – a vice chairman and a deputy managing director.

11. Dish TV could buy more shares from Videocon d2h in a supplementary transaction. The Dish TV principals are in discussion with the Vd2h principals to purchase some of the latter’s shares in Dish TV Videocon after the amalgamation.

12. Combined net debt is Rs 2,161 crore. Net debt to operating profit is 1.2 times.

13. Merger to lead to significant cost synergies. There will be combined sourcing and purchasing.

14. The Videocon group has extensive distribution and service expertise, with set-top box sourcing and manufacturing advantages. Dish TV has extensive media experience and content sourcing.

15. Merged entity is also expected to grow alternate revenue streams like carriage, advertising, value-added services and new channel launches. These are highly margin accretive.

16. Combined entity will have better bargaining power in stitching content deals. It will also be in a better position to take price hikes, though this will depend largely on the pay TV ecosystem.

17. Merged entity will have 2.8 million HD subscribers.

18. Proposed transaction is expected to close in the second half of 2017. It is subject to approvals, including from SEBI, the stock exchanges, shareholders and creditors of both companies.

19. Upon closing of the proposed transaction, Dish TV Videocon shall continue to be listed on the NSE and the BSE in India and on the Luxembourg Stock Exchange in the form of GDRs. Holders of Vd2h ADRs will receive their new shares in the form of GDRs, unless they elect to receive and hold new shares directly.

[iNCEPTiON2017]

What would be the benefit to us ? I already have videocon D2h box with me .. ? is it any good ? or I just use Starsat LOL

[Umair Malik]

What would be the benefit to us ? I already have videocon D2h box with me .. ? is it any good ? or I just use Starsat LOL

So far this deal has no head and tail. Just wait for further details

[ankitksinghh]

Hello guys

IN MUMBAI Ending months of speculation, India's largest direct-to-home (DTH) player Dish TVBSE -0.60 %, and NASDAQ-listed Videocon d2h (Vd2h) have decided to merge operations to form one of the largest pay TV operators in the world with 27.6 million net subscribers.

The board of directors of the two companies approved a scheme of arrangement for amalgamation on Friday. Dish TV shareholders will own 55.4%, while the remaining 44.6% shares will be owned by Vd2h shareholders in the new entity, Dish TV Videocon Limited.