Zee Media Acquires Majority Stake in India Today’s Retail Ventures; All Set To Launch Shopping Channel

Zee Media Corp. Ltd. Has informed Bombay Stock Exchange that they are acquiring majority stake in two of India Today’s retail companies. In the filing, Zee Media informed BSE that they are acquiring 80% stake in Today Merchandise Pvt. Ltd (TMPL) &  Today Retail Network Pvt. Ltd (TRNL) by paying Rs 166 crore; both of which are subsidiaries of Living Media India Ltd which own India Today magazine and other publications.

Zee Media Corp. Ltd. Owns Zee News and Zee Business channels; and this giant shake up of media czars has intensified speculations regarding the future.

Today Retail Network Pvt. Ltd was incorporated in 2007 while Today Merchandise Pvt. Ltd was set up in 2010; both of them are based out of New Delhi.

Why Zee Decided To Buy India Today firms?

The filing done at BSE makes it clear that Zee wants to launch their TV Shopping channel, and both of these companies will assist them in this endeavor.

Both of these companies from India Today group are involved in retail and ecommerce ventures (bagittoday.com), and Zee wants to consolidate their position by acquiring majority stakes in these firms.

Interestingly, TMPL posted a turnover of Rs.3.84 crore in 2015, which is a reduction of 26% compared to last year while TRNL posted a turnover of Rs.37.36 crore, which is a 28% decline from Rs.52.45 crore a year ago.

As per the filing, Zee said, “With its investment in the target companies which have built the infrastructure for the TV shopping channel along with a complementing website, the company will be able to not only shorten the launching time of the TV shopping channel but also be able to scale up a faster pace. The company with its existing broadcast operations will also be able to drive the synergy benefits from this proposed investment,”

How Will It Work?

Zee will make the payments to India Today in installments: By June end, Zee will spend Rs 39.78 crore to acquire 49% stake in both the companies. Zee will take over operational and managerial control by that time.

In the next 4 years, Zee will spend Rs 126 crore to complete the deal, and acquire 80% stake in these two firms of India Today by ‘subscribing to any security convertible into equity shares of both companies, at par value’

The intentions of Zee Media are clear: they want to launch their TV shopping channel, and India Today’s old properties in retail and ecommerce will help them with it. However, can Zee Media also influence India Today’s editorial and content operations? Will Zee also buy out India Today brand one day?

We will keep you updated.