Can a union of two rivalries make a Blockbuster?

The marriage of the Indian Multiplex couple (PVR and Inox) has multiple impacts on the Indian entertainment Industry.

 

The most celebrated climax in Indian cinemas is the marriage of the hero and heroine. The same is the climax of India’s giant multiplexes – PVR and Inox Leisure. On March 27th, 2022, they both decided to engage. The marriage has yet to be approved by the Competition Commission of India.

India is a country that produces the maximum number of movies in a year. The cinema houses were one of the most used entertainment venues by Indians. But, as the internet took over the world, OTT platforms mushroomed. The pandemic has introduced OTT to many and they still are a big source of entertainment for a big chunk of the Indian population.

The merger is an attempt by the multiplex giants to come back and recover from the bruises that this industry has suffered in the last two years. As the vision and the mission of both organisations are the same, the merger will ensure that the synergy will not create any conflict of interest. This M&A (Mergers & Acquisition) is a win-win situation for both these organisations because of the following prime reasons:

  1. Inox has 675 screens at 160 properties in 72 cities that are focussed on eastern and western India and PVR has 871 screens at 181 properties in 73 cities that are mostly over the north and south regions. This amalgamation will make the number of screens to 1546 at 341 properties in 109 cities with coverage all over the nation. The market share of PVR Inox will be 16%-17% in total screens of India, which includes single screened theatres, and 44%-50% market share of multi-screen theatres after this alliance. This union ensures that the best cinema experience is even bestowed upon the tier-2 and tier-3 city population. 
  1. Inox is a cash-rich company with better financial credibility, on the other hand, PVR is currently trapped deep in a debt trap. This synergy will help these companies clear all debts and have sound financial statements.
  1. This unification increases the bargaining power for the PVR Inox by multifold from what they had when they were separate. They will have a better say over the F&B (Food and Beverage) dealers, can strike a good percentage from the advertisers, and the list goes on. This marriage has created a form of Monopoly for these mammoths.

Will this be a happy ending? Only time would tell us. But what are your feelings?

Related Articles

Responses

Your email address will not be published.