PVR's Aborted Acquisition of DLF's DT Cinemas
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Case Code: BSTR372 Case Length: 15 Pages Period: 2009 - 2010 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.300 Organization: PVR Ltd, DLF's DT Cinemas Industry: Media and Entertainment Countries: India Themes: Acquisition and Strategic Alliance |
Abstract Case Intro 1 Case Intro 2 Excerpts
"The acquisition of DT Cinemas and long-term strategic partnership with the DLF Group is part of our expansion strategy. PVR will now control 60-70 per cent of the market share in Delhi and Gurgaon market."
- Ajay Bijli, Chairman and Managing Director, PVR Ltd., in November 2009.
"PVR is the leading multiplex brand with a proven track record and established leadership credentials. The partnership with PVR allows us to focus on our core business of real estate while ensuring the highest quality of entertainment being offered to the retail customers is commensurate with DLF's standards."
- Pia Singh, Director, DT Cinema Ltd., in November 2009.
"It is a clear example that the industry will have to consolidate and it is good because there will now be only a few serious players in the game."
- Vishal Kapur, Chief Operating Officer, Fun Cinemas4, in November 2009.
"Multiplex chain operator PVR Ltd has terminated its agreement to acquire the cinema exhibition business of DT Cinemas Ltd, a DLF Group company. PVR said that both parties mutually agreed not to extend the period for completion of the pact. PVR said the agreement was cancelled as the 'condition for acquisition' has not been met by DT Cinemas."
- The Hindu Business Line, February 15, 2010.
"The deal would've have made PVR a formidable force in the multiplex space in India, especially in the north."
- Nikhil Vora, Managing Director, IDFC-SSKI Securities Ltd., in February 2010.
Introduction
The cinema exhibition landscape in India underwent a significant change in the first decade of the 21st century, with a rapid increase in the number of multiplexes. As favorite leisure spots, multiplexes offered a wide choice of films to moviegoers along with facilities for shopping and eating out.
By November 2009, there were half a dozen big operators in this segment, with each operator having more than 50 screens8, and multiplexes were major revenue contributors to the cinema exhibition business in India.
Assessing the business potential of the sector, many operators were in the process of expanding their presence through organic growth. Apart from catering to metropolitan cities, these companies were spreading their multiplexes operations to Tier II and Tier III cities.
Competitive pressures and the need for scaling up also prompted some operators to evaluate other strategic options such as acquisitions and strategic alliances. PVR's deal to acquire the DLF Group's DT Cinemas in November 2009 was viewed as one such strategic move...
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