The combination of PVR and INOX is a big deal in the media and entertainment world, and it's great news for the film business. With both companies' sales plummeting during the Covid 19 outbreak, there has never been a better time to merge. PVR INOX Ltd will be the combined entity's name, with existing screens branding remaining PVR and INOX. PVR's promoters will control 10.62 percent of the combined company, while Inox would possess 16.66 percent. INOX and PVR will merge in a share swap ratio of 3 PVR shares for every 10 INOX shares. The merger is subject to the approval of PVR and INOX shareholders, as well as stock exchanges, SEBI, and any other regulatory clearances that may be required. Multiplex chains have had a particularly difficult time in recent years. When the threat of an unseen illness loomed large, people were locked up at home, movies weren't coming out thick and fast, and no one wanted to go to the movies. According to some estimations, the Indian film business lost at least 15,000 crores as a result of the incident. It was a disaster. Netflix and Amazon Prime, have increased their direct assault. They persuaded filmmakers to release their films only on online platforms, bypassing the traditional theatre distribution. In other circumstances, filmmakers willingly shorten the theatrical window in order to release their films as soon as feasible via OTT platforms. This was another setback for an industry already reeling from the pandemic's aftermath. This merger demonstrates that they aren't going to take any of it lying down. In fact, both corporations stated after the announcement that this merger was an attempt to "resist the onslaught of OTT players." This decisive cooperation would result in increased productivity due to size, a broader reach in fresh markets, and significant cost-cutting options, while continuing to excite moviegoers with world-class experiences and ground-breaking innovations. PVR has 871 screens spread across 181 locations in 73 cities, whereas INOX has 674 screens spread across 160 locations in 72 cities. The combined company will be India's largest cinema exhibition company, with 1546 screens spread across 341 locations in 109 cities. The combined firm will provide PVR-INOX more power and weight to grow much faster in adding new screens in Tier-II and Tier-III areas, where India is severely underserved in terms of cinema screens. From the standpoint of the industry, this consolidation would result in more investment into the sector, faster scaling of theatre screens, and more capacity, all of which would benefit the cinema industry and its stockholders. The most important takeaway from the combination of PVR Ltd. and INOX Leisure Ltd. is that it will enable the newly merged business to acquire a certain scale, which would reduce operational expenses. Both of these companies are public listed companies, and their books of accounts are easily accessible. When you consider how much money is spent on the operational components of the multiplex business, you can see that it is a very high opex business. Beyond a certain point, the cost of real estate cannot be negotiated. But, aside from that, human costs, as well as the costs of other entities used by multiplexes, can all be reduced by obtaining a certain level of scale. A combination like this was urgently required. We as exhibitors have learned from the epidemic that lowering opex without sacrificing the quality of the customer experience is something we all need to strive towards. While they were distinct, all of these entities followed similar principles, and they will continue to do so when they are merged. Having said that, even the combined organisation will not contribute to a business size that will simply topple everyone who stands in their way. There are additional companies like Cinepolis India Pvt Ltd. and Miraj Cinemas, as well as a slew of others, that operate on a large scale. When it comes to negotiating commercials or terms of play in this company, it will find its own level, just as water does. It is critical for this organisation, as well as the broader exhibition industry, to make money. When content creators choose to come to exhibitors or go straight to streaming, it's equally crucial to have them believe in the theatrical medium and have big profits coming from it. Thank you.
Facts of the case have been duly covered
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