Zee acquisition of India Today retail arm signals shopping channel launch


Details

Rebecca Hawkes

| 29 February 2016




Zee Media has acquired an equity stake of up to 80% in two retail-based subsidiaries of India Today Group division Living Media India, to speed up its entrance in the TV shopping channel sector.



Although currently running into losses, the subsidiaries Today Merchandise and Today Retail Network have been developing infrastructure to launch a shopping channel and already operate an e-commerce website called www.bagittoday.com.

By June 2016, Zee Media will acquire 49% stake by investing approximately INR397.8 billion by subscribing to equity shares of Today Merchandise and Today Retail Network, at par value. Zee will gain managerial and operational control over the target entities.

Zee Media will increase its stake by investing INR1.26 billion in the subsequent four years, subscribing to any security convertible into equity shares in both companies, par value. When converted, the company’s shareholding would be 80% of the fully diluted capital of Today Merchandise (TMPL) and Today Retail Network (TRNL).

The corporation plans to invest almost INR1.658 billion in developing its TV shopping operations in the next four years.

Zee Media’s board of directors has approved the stake acquisition in principle, and expects to derive synergy benefits with its other broadcast operations, the company said in a statement to the Bombay Stock Exchange.