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RIL Acquisition of Network18

Report of how RIL acquired Network18. Reasons behind the acquisition and composition of the industry.

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Saguna Datar
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299 views

RIL Acquisition of Network18

Report of how RIL acquired Network18. Reasons behind the acquisition and composition of the industry.

Uploaded by

Saguna Datar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Mergers and Acquisitions Strategies

Introduction of the two firms:Reliance Industries Limited (RIL):


Reliance Industries Limited (RIL) is a conglomerate company with
businesses engaged in power, petrochemicals, textiles, natural resources,
retail and telecommunications. RIL is Indias one of the largest private
sector company. It is a significant global player in the integrated energy
value chain.
Network18 Media & Investments Limited:Network18 Media and Investments Ltd. is a media and entertainment
company with different businesses in television, internet, filmed
entertainment, mobile content, magazines and allied businesses.
Network18 manages various digital businesses and operates digital
commerce properties. In addition, Network18 is a leading player in the
Publishing. It has an extensive outreach spanning close to 225 million
television viewers and an average of approximately 25 million unique
digital visitors per month.

State of the Industry:Network 18 is in mainly TV media industry. The state of the industry could
be told by calculating its Herfindahl-Hirschman index (HHI).
Holding
company name

Market
Share

Essel

54.41

Sun TV Networks
Network 18
Den Networks
UTV Software MNC
India Today
Times of India
Ortel
Communications

15.04
9.29
5.66

2960.
76
226.1
8
86.38
32.08

4.88
3.66
3.41

23.78
13.40
11.62

1.26

1.58
3355.
78

HHI

As the HHI of the industry is well beyond 3000, we can safely say that this
industry is extremely concentrated. This shows only one major part of
Network 18 Media & Investments Limiteds portfolio of companies.

Corporate Strategy of the Firms Involved


Reliance Industries Limited:
Reliance is pursuing its strategy to grow, by leveraging its existing knowhow and asset base and investing in opportunities strategic to its existing
businesses and those of the future. Reliance initially focuses on activities
and investment in India to take advantage of the large domestic market,
as it currently holds a leadership position in it. The company has invested
more than $35 billion in existing and new business. The largest acquisition
for the company was Network18 in 2015.
Network18:
Network18s business strategy is steered by its commitment to keep its
viewers ahead in life, always. From being early adopters of the latest
digital and other technologies, to the pioneering home shopping initiative,
its ground-breaking innovations have charted a new course for the
industry through the years. TV18 is a wholly owned subsidiary of Network
18.

Nature and Intent of the Deal:


In the biggest ever deal in the media industry RIL acquired control in
Network18 and TV18 which is a subsidiary of Network18. The deal valued
at 4000 crores. It resulted in a 78% holding of RIL in Network18. It was an
all-cash deal. This acquisition will differentiate Reliances 4G business by
providing a unique amalgamation at the intersect of telecom, web and
digital commerce via a suite of premier digital properties, said RIL.
The main motive behind the deal was the synergy between Network 18
and the upcoming Jio Communications. They needed a content factory of
an enormous scale. The Network 18 group will provide them with the
content needed for the bundled services they are planning for the future.
Another motive behind the acquisition would be diversification. Reliance is
a conglomerate and it looks for opportunities for investments. Network 18
was doing pretty good in recent years and was a good target for RIL.
Since RIL was receiving a negative publicity in recent times this
acquisition would also give control over some prominent news channels.
This was also a hidden motive behind the transaction.

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