The Indian cinema industry is set for a mega transformation as two big multiplex owners with 1,500 screens decide to merge their businesses.
Inox Leisure will buy out PVR, the country’s market leader in terms of the screen count. The decision to merge was announced on 27 March 2022, as the board of directors of the two companies granted approval for an all-stock amalgamation deal.
Post-merger, the company’s new brand will be PVR Inox and Inox promoters’ stake will be 16.66%, while PVR promoters will hold 10.62% in the merged entity. The board of directors will be reconstituted comprising 10 members, and that will include two seats each from both the parent companies.
The swap ratio of shares exchanged under the deal will be 3:10, where Inox shareholders will receive three shares in PVR for every 10 shares of Inox.
Ashraya Rao and Manas Kumar Chaudhuri were the lead partners from Khaitan & Co, while Anisha Chand, Adheesh Nargolkar and Smriti Yadav, along with associates, acted as the legal advisory team for Inox Leisure.
“This was a landmark deal in the making, and we are grateful to have supported the Inox Leisure team,” Ashraya Rao, lead partner in the deal from Khaitan & Co, told India Business Law Journal.
“Consolidation was key in this space, considering the major impact of covid-19 and synergies that the two iconic cinema brands can bring together should help consumers and other players. We are thrilled that our deep cross-practices could collaborate well and carry this through.”
Shardul Amarchand Mangaldas & Co were the legal advisers to PVR. Their team comprised Raghubir Menon, Anirban Bhattacharya, Yogesh Chande, Anirudh Das, Shweta Shroff Chopra, Manika Brar and JV Abhay.
Ajay Bijli will be appointed as managing director and Sanjeev Kumar will be executive director of the new branded entity, PVR Inox. Pavan Kumar Jain will be non-executive chairman, while Siddharth Jain will be appointed as non-executive non-independent director in the joint entity.
“The coming together of two iconic cinema brands, which are driven by passion, is certainly the most historic moment in the Indian cinema exhibition industry,” said Siddharth Jain.
