India's two largest multiplex firms said on Sunday they would merge to create a giant cinema operator with more than 1,500 screens across 109 cities as the entertainment industry recovers from the Covid-19 pandemic, Reuters reported.
PVR and INOX Leisure said the merger, which is still awaiting regulatory approval, would help both companies enhance efficiency, expand into new areas, and reduce costs.
"The film exhibition sector has been one of the most severely impacted sectors as a result of the pandemic, and creating scale to achieve efficiencies is critical for the long-term survival of the business and combating the onslaught of digital OTT platforms," PVR Chairman Ajay Bijli said in a press release.
According to the statements, the merger will unlock significant complementarity and growth potential, as well as compelling revenue and cost synergies.
PVR's Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director of the merged entity.
Inox's Pavan Kumar Jain would be appointed as the Non-Executive Chairman of the Board and Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.
PVR CMD Ajay Bijli told reporters that the pandemic had left the film exhibition industry bruised for the last two years, and that the "decibel level of OTT platforms also increased," posing a challenge to the industry.
"We believe that India is a market where the most popular form of entertainment for people is to go out and watch movies on the big screen (and) that this has been damaged." We believed that combining two companies with similar visions, a qualitative approach to providing a great consumer experience, and strengthening our financial sheets would only help to move the industry forward and ensure the exhibition sector's continued success,” he added.
PVR currently operates 871 screens across 181 properties in 73 cities while INOX operates 675 screens across 160 properties in 72 cities.
“The combined entity will become the largest film exhibition company in India operating 1,546 screens across 341 properties across 109 cities,” the filings said.
The nearest rival Cinepolis India operates 360 screens under the brand names of Cinépolis, Cinépolis VIP, and Fun Cinemas.
Inox Leisure had a turnover of ₹148 crore including other income of ₹42 crore for the financial year ended March 31, 2021. Its total assets are worth ₹3,784 crore.
On the other hand, PVR had a turnover of ₹698 crore, including other income of ₹472 crore in FY 2020-21. Its total assets were ₹7,450 crore.