E-commerce company Homeshop18 and home shopping network Shop CJ Network Pvt. Ltd have combined their businesses, thereby completing the transaction proposed in September 2017, the company said in a statement late on Thursday.
This combination makes HomeShop18 the largest TV home-shopping network in India.
The resultant benefits of scale shall better the growth prospects for the combined entity, allowing it to improve its standing in the TV home-shopping landscape and compete better with the challenge from e-commerce companies.
Going forward, HomeShop18 will cease to be a subsidiary of Network18 Media and Investments Ltd. However, Network18 shall continue to be the largest shareholder in the combined entity.
Under the deal, shareholders of Shop CJ will be issued 25% equity in HomeShop18, making Shop CJ a subsidiary of HomeShop18.
Homeshop18 was a subsidiary of Network18 Media and Investments, with SAIF Partners, GS Home Shopping South Korea and OCP as co-investors.
Shop CJ is an equal joint venture between South Korean home shopping company CJO Shopping Co. Ltd and P5 Asia Holding Investments (Mauritius) Ltd from the Providence Equity Partners group.
“HomeShop18 has optimized its operations substantially since the challenges faced in the last year. We believe multiple synergies with respect to sourcing, marketing and delivery can be exploited through a combination with Shop CJ, which shall further accelerate this process,” the company added.
Pursuant to this transaction, Shop CJ shareholders hold 25% in the combined entity.
Source: Mint