M & A CritiqueThe over Rs 22,500 crore Essel Group is one of the most prominent business houses in the country with a diverse portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education. It forayed into business in 1926 with a humble beginning. It was a commodity trading and export firm called Rama Associates Limited and has since then transformed itself into a diversified conglomerate in India and operations abroad. In fact, Essel Group companies reach out every day to millions of consumers across the globe.
Zee Entertainment Enterprises It is one of the country’s leading television media and entertainment companies and is one of the largest producers and aggregators of Hindi programming in the world. Similarly, Zee Media Corporation Limited is the country’s largest news network with host of national and regional channels across India as well as those of its digital properties like zeenews.com and dnaindia.com. Dish TV is Asia’s largest Direct to Home Entertainment Company. It is a pioneer when it comes to digital entertainment and the innovative offerings have earned it the prestigious place of being the world’s third largest DTH company. SITI Cable Network Limited (erstwhile known as Wire and Wireless (India) Ltd) is also part of the Essel Group,
Diversification is group’s mantra
The group is quite diversified as has presence in many fields. Cyquator Technologies is a total end-to-end IT infrastructure outsourcing company involved in the business of Internet Data Center and high end managed hosting services. Playwin, India’s first and largest online gaming company, is in the business of providing infrastructure, data communication, marketing support and service to facilitate a secure online lottery network. Pan India Paryatan Limited (PIPL), belonging to the Group owns and operates two amusement parks. Essel Propack is the largest specialty packaging company – manufacturing laminated and seamless or extruded plastic tubes. Essel Infraprojects Limited is one of the fastest growing companies having diversified interests in infrastructure projects with three key Strategic Business Units in areas of Core Infrastructure, Green Solutions & Integrated Utilities Services.
Essel Finance is a customer-centric, pioneer financial services firm arranged into three business groups – commercial finance, investment banking and private equity. The Group’s global arm –
Essel Middle East — is Essel Group’s overseas extension, based in Dubai UAE. Essel Middle East is involved in the business of mineral mining, oil explorations and acquisition of natural resource assets globally.
In 2008, the Essel Group was restructured and the shareholding was split among four brothers of Dr. Subash Chandra. While Dr. Chandra is the Chairman of the Group, each of the businesses is run by his brothers or their sons. The Group has a vision to be on the top of the league in each business it operates and bring value for share-holders. Essel Group’s zeal to grow would see more actions in the New Year ahead.
Growth through Acquisitions
Dr Subash Chandra’s Essel Group is on major acquisition drive since few months. The group which had earlier concentrated on in-house entertainment is acquiring companies to be on the top in the business. The Group has acquired radio stations, television channels and direct-to-home services to stay ahead of the curve in its flagship media and entertainment business – Zee, Dish TV and Siti Cable.
This year, the Group made several policy announcements related to acquisitions and expansion for growth. Essel Group’s Dish TV announced that it was merging with Videcon d2h. The Group also consolidated its position in the financial sector by acquiring Peerless Mutual Fund. In November, the Group’s construction and infrastructure company Essel Infra acquired two road projects from KNR Constructions and Patel Engineering. Essel Group has been relentlessly conquering feat after feat, adding new feathers to its cap with each new achievement.
In order to expand its business in other areas, the Group Middle East wing – Essel Group Middle East had bid for five oil and gas blocks in India. The Group’s day-to-day activities are spearheaded by Dr Chandra’s sons Punit Goenka, who runs Zee, and Amit Goenka, who runs Zee’s international arm. Dr Chandra is the visionary leader of the Group and an independent Rajya Sabha Member of Parliament.
Acquisition of Reliance Broadcast Network
And the icing of the acquisition cake was when the Group’s flagship company Zee acquired Anil Dhirubhai Ambani’s Reliance Broadcast Network Essel’s group flagship media company ZEE has acquired Anil Ambani’s TV, radio business wherein it will take full control over the radio and television business housed under Reliance Broadcast Networks Ltd (RBNL). In a statement, Reliance Capital, the investment arm of Anil Ambani-led Reliance Group, announced “value unlocking” in the radio and TV businesses that will reduce the company’s debt by Rs 1,900 crore after the completion of sale transactions. For Zee, the transaction shall bring about the desired business diversity of the company and will help in achieving the sound financial objectives at an accelerated pace.
The deal also includes Zee Entertainment Enterprises Ltd (ZEEL), which houses the national and regional entertainment channel of the Zee group, acquiring 100% stake in Reliance’s general entertainment TV business – Reliance Big Broadcasting Private Limited, Big Magic Limited & Azalia Broadcast Private Limited. RBNL’s TV business includes operational channels – Big Magic (Hindi) and Big Ganga (Bhojpuri) – and four TV licenses. According to Ministry and Information and Broadcasting regulations, at least 51% shareholding will have to be held by the permission holder for a minimum period of three years from the date the channels were operationalised. The lock-in period for the 45 operational licenses shall expire on March 31, 2018. The acquisition will add to the company’s expanding universe of general entertainment channels. Big Magic will give it access to comedy genre enhancing customer offerings. Big Ganga also syncs with the company’s strategy of expanding into the regional markets which offers attractive growth potential. In order to stay ahead of competition in radio, in September last 2016, the Group picked up United Arab Emirates’ oldest radio station Hum. Earlier, it did few more acquisitions and divestment like Odia channel Sarthak in 2015, disinvestment of Ten Sports in early 2016.
