Inox Leisure and PVR announce merger

PVR and Inox Leisure have announced a merger. 

On 27 March 2022, the board of directors of Inox Leisure and PVR, approved an all-stock amalgamation of the two cinema operators. 

The aim of the merger would focus on using the strengths of both organisations to provide customer service and cinema experience to Indian moviegoers.  

The amalgamation is subject to the approval of the shareholders of Inox and PVR respectively, stock exchanges, SEBI and other regulatory approvals will be required. 

Post the merger, the promoters of Inox will become co-promoters in the merged entity along with the existing promoters of PVR.

Upon effectiveness of the scheme, the board of directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the board with two board seats each.  

Pavan Kumar Jain would be appointed as the non-executive chairman of the board. Ajay Bijli would be appointed as the managing director and Sanjeev Kumar would be appointed as the executive director. 

In addition, if the deal goes through, Siddharth Jain would be appointed as a non-executive non-independent director in the combined entity. 

Accordingly, Inox shareholders will receive three shares of PVR for ten shares of Inox.  

Post the merger, Inox promoters will have a 16.66% stake while PVR promoters will have a 10.62% stake in the combined entity. 

With Inox operating 675 screens across 160 properties in 72 cities and PVR currently operating 871 screens across 181 properties in 73 cities, the combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties across 109 cities. 

EY is the financial advisor on the transaction. Dhruva Advisors and Khaitan & Co acted as the transaction tax advisors and legal advisors respectively to Inox.

Siddharth Jain, director, Inox Leisure, said, “Coming together of two iconic cinema brands, which are driven by passion, is certainly the most historic moment in the Indian cinema exhibition industry. Both companies have set high service benchmarks in an endeavour to offer the best cinema experience in the world, to the most passionate moviegoers, and would continue to do so as a unified entity. As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimization opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations.”  

Ajay Bijli, chairman and managing director, PVR, said, “This is a momentous occasion that brings together two companies with significantly complementary strengths. The partnership of these two brands will put consumers at the centre of its vision and deliver an unparalleled movie-going experience to them. The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms.”