31 March,2022: Owing to the COVID 19 pandemic, two of the largest multiplex firms PVR and INOX, previously competitors, are merging together to prevent their businesses from failing.
COVID-19 and the pandemic has drastically affected the business of the multiplexes in a negative way and cinema halls were closed for a span of almost two years. This, alongside the growing popularity of over-the-top (OTT) platforms, has now led to old competitors becoming partners.Two big multiplex chains, PVR and INOX Leisure, have decided to merge and has by default created the largest film exhibition company in India.
"The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms," PVR Chairman Ajay Bijli said.“Footfalls are completely dependent on the quality of new releases, and the multiplexes have no control over that. Most importantly, they have been losing out to international OTT behemoths in terms of the release of new content. Therefore, this merger of PVR and INOX should be seen as a last resort defensive step to drive cost efficiencies.” said Abhay Agarwal, founder and fund manager at Piper Serica, a portfolio management service (PMS) provider.
PVR is India's largest multiplex chain with more than 850 screens, followed by INOX Leisure with about 650 screens. These two multiplex firms said they would merge to create a giant cinema operator with more than 1,500 screens across 109 cities As per the agreement, INOX will merge with PVR in a share swap ratio of 3 shares of PVR for every 10 shares of INOX.When the merger comes into effect, the board of the merged company would have 10 members and both the promoter families will have equal representation on the Board with two board seats each. Further, Ajay Bijli would be appointed as the managing director and Sanjeev Kumar, director of INOX Leisure would be appointed as the executive director.