Reliance gets CCI approval for stake acquisitions in DEN, Hathway
MUMBAI: Reliance Industries Ltd (RIL) has got the Competition Commission of India (CCI) approval to acquire stakes in cable TV companies DEN Networks and Hathway Cable and Datacom.
On 18th October 2018, RIL had acquired 66% stake in DEN Networks for Rs 2290 crore and 51.3% stake for Rs. 2,940 crore in Hathway Cable and Datacom. Additionally, RIL had also got a minority stake in GTPL Hathway.
The oil to telecom conglomerate will now make an open offer to public shareholders of the three companies.
The stake acquisition is being effected through six special purpose vehicles (SPVs) owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of RIL, is the sole beneficiary.
“It is hereby intimated that the approval of the Competition Commission of India has been received on January 21, 2019 for the above acquisition by six SPVs 100% owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of the Company is the sole beneficiary,” RIL said in a filing to the BSE.
The company further stated that the approval will enable subscription to the preferential issue of equity shares by DEN and Hathway and purchase of equity shares of DEN from the existing promoters, as specified in the disclosure dated 18 October 2018.
RIL also said it has received further comments on the draft letter of offer from SEBI for the mandatory open offer to the shareholders of Hathway. The open offer will be made in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
However, SEBI’s comments on the draft letters of offer for the mandatory open offer to the shareholders of DEN, GTPL Hathway, and Hathway Bhawani Cabletel and Datacom, are awaited.
The acquisition will give RIL direct access to DEN and Hathway’s vast broadband infrastructure and a large pool of pay cable TV subscribers. RIL can use this last mile connectivity to accelerate Reliance Jio Infocomm foray into the fiber-to-the-home (FTTH) market.
In its recent Q3 filing, RIL had stated that JioGigaFiber services for Home broadband, Entertainment, Smart Home Solutions, Wireline, and Enterprise has witnessed overwhelming customer interest across 1,400 cities.
Jio is currently connecting homes on priority based on the requests received and optimising its service offerings.
It had also stated that post completion of the transaction with DEN and Hathway, Reliance and Jio will be strengthening the business model of 27,000 LCOs that are aligned with DEN and Hathway across 750 cities, by creating multiple future opportunities with new services and platforms.