MUMBAI: A year ago, one of India’s leading media companies announced that it was acquiring the regional broadcast network; yesterday it informed the stock exchange that it had completed the transaction. We are referring to TV18 Broadcast, a subsidiary of Network 18, which sent a note out to the Bombay stock exchange that it had successfully completed the acquisition of the Ramoji Rao promoted ETV network with effect from 22 January 2014.
The channels were acquired at a price of Rs 2,053 crore according to the Share Purchase Agreement which is well within the budget of Rs 2,100 crore that was approved by its board last year. The deal resulted in it acquiring 100 per cent of regional Hindi news channels ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar and ETV Urdu and 50 per cent in ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya. The Telugu news and GEC channels ETV Telugu and ETV Telugu News will, however, see TV18 owning only 24.50 per cent equity.
Excepting for the two Telugu channels, TV18 will have complete board and management control over all the other channels. Additionally, it will be holding the 50 per cent stake in the five regional GECs as an asset held for sale. The interest in these channels, its filing with the BSE states, will transferred to an associate company. Sources indicate that the channels are most likely going to be added to its Viacom18 joint venture or another company in the group. This will help it keep separate identities for TV18 Broadcast as a news channel enterprise, and GECs under Viacom18, if the transfer does happen under it.
The deal cements TV 18 and Viacom 18’s presence in the regional space. When contacted, Network 18 group CEO B Sai Kumar, he said that the deal had been waiting to come through and more details would have to wait a while.
With one more transaction out of the way, Network18 can now focus on expanding its portfolio further through a Gujarati business news channel in the next few months as announced by Sai Kumar barely a week ago, clearly signalling that things are turning around at the group which was once ailing, thanks to its heavy debt burden.