InvestorQ : How exactly is the merger deal between PVR and Inox Leisure being structured and what are the synergies you see?
vaishnavi mhatre made post

How exactly is the merger deal between PVR and Inox Leisure being structured and what are the synergies you see?

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vidhya Laxmi answered.
1 month ago
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During the week gone by, the major merger deal between PVR and Inox Leisure through a stock swap, was announced by both the companies. The deal was long being discussed as the only answer to the rising troubles for multiplex companies. Let us first look at the contours of the deal. More than 850 screens of PVR will combine with over 650 screens of Inox Leisure giving the company total screen presence of over 1,500 screens,

The total deal will be executed via stock swap so there will be no cash paid or received as part of the deal. Shareholders of Inox Leisure will be issued shares of PVR in lieu of their existing holdings in Inox Leisure. All existing PVR and Inox screens will retail their individual branding while all the new screens will be branded as PVR Inox. The merger comes at a time when both the entities are struggling under a mountain of falling revenues and rising losses.

In terms of market share, the two companies will have about 55% to 60% of the overall multiplex exhibition market. It could be an issue with the CCI, although it may not be too serious if a broader picture is taken. In the aftermath of the pandemic, PVR and Inox have taken huge losses and it will be a long road to recovery. However, the merger gives them greater bargaining power with lenders, vendors, food outlets, partners and customers.

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