RIL announces mega merger of media business; stocks surge

The media stocks Network18, Den networks, Hathway Cable and TV18 Broadcast which are part of Reliance Industries Limited (RIL), gained as much as 10 to 20 per cent in the opening trade on Tuesday.  The surge in stock prices came on back of the announcement of mega merger announced on Monday evening.

The scheme of amalgamation is aimed at making Network18, the largest and integrated media company with revenue of nearly Rs 8,000 crore, as compared to Rs 5,000 crore revenue of FY19. The consolidation of cable businesses of Den and Hathway is expected to leverage the overall strength of all the partners and touch points.

The proposed share swap ratio is as follows:

1) 92 shares of Network18 for every 100 shares of TV18
2) 78 shares of Network18 for every 100 shares of Hathway
3) 191 shares of Network18 for every 100 shares of Den Networks

On completion of the merger, the broadcasting business will be housed in Network18 while, the cable & ISP business would be in separate wholly-owned subsidiaries of Network18.

The shares of Network18, TV18, Den Networks and Hathway Cables traded with gains of five per cent, 13 per cent, 10 per cent and 20 per cent, respectively on BSE.