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HomeShop18 and Shop CJ combine businesses

HomeShop18 (TV18 Homeshopping Network) and Shop CJ Network have combined their businesses, the company informed BSE. This deal had been proposed back in September last year, with HomeShop18 wanting to acquire a 74% stake in Shop CJ.

Following this deal, Shop CJ’s shareholders will hold a 25% stake in the combined entity, and HomeShop18 will cease to be subsidiary of Network18 Media & Investments Ltd. However, Network18 will still be the majority shareholder in the combined entity.

HomeShop18 said:

We believe multiple synergies with respect to sourcing, marketing and delivery can be exploited through a combination with Shop CJ.

It’s worth noting that around the time Homeshop18 withdrew its $75 million IPO application to list on the New York Stock Exchange, its parent company Network18 had said that “Homeshop18 has strategically scaled down its digital home shopping business to leverage the potential in the TV home shopping segment, which it dominates with its innovative initiatives.”

Also note that at the end of Q1FY18, Network18 had said that HomeShop18 continued to face challenges due to decline in cash-on-delivery payments post demonetization, and “stiff competition from e-commerce”. However, the company added that the GST rollout was a positive for HomeShop18 since it will eliminate the issue of state entry taxes. “Management is keeping a tight leash on costs, and taking steps to revive the business.”

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