India’s two largest cinema chains PVR Ltd and Inox Leisure Ltd. agreed to merge their operations to create the nation’s largest film exhibition company.
On Sunday, local media reported that the boards of PVR and Inox had agreed terms for an all-stock merger, subject to regulatory approval. The new entity is expected to be called PVR Inox Ltd., with existing cinemas to retain their respective branding and brand new cinemas after the merger under the PVR Inox brand, PVR said in a statement to local media.
Should the merger go through, PVR said the new company would seek to expand its presence in India, targeting new PVR Inox-branded multiplexes in Tier 2 and Tier 3 cities across the country.
The merged entity would be, by far, the largest exhibition company in India, with a total of 1,546 screens spread across 341 properties in 109 cities to account for 40% market share. The next largest operator would be Carnival Cinemas, which had around 450 screens in 2019, and further afield, Cinepolis India, with 381 screens, also in 2019.
The COVID-19 pandemic has hit India’s once-thriving cinema market hard, with repeated nationwide shutdowns disrupting business in addition to the additional costs associated with health and safety compliance, adding a further pressure on profits. Additionally, the pandemic has seen greater change and acceptance by Indian consumers for streaming services, from Bollywood blockbusters to low-cost independents.
In statements to Indian media, PVR and Inox executives acknowledged the difficult operating environment for their businesses and said they hoped greater scale could allow the merged entity to take advantage of any rebound. cinema in the country.