In yet another consolidation in the multiplex business, PVR Ltd on Tuesday acquired DLF's 'DT Cinemas' for Rs 500 crore on a slump sale basis.
"The Board of Directors of the company at its meeting held on June 9, 2015, has approved acquisition of the cinema exhibition business of DLF Utilities Ltd," PVR said in a filing to BSE.
It further said: PVR Ltd executed definitive agreements with DLF Utilities Ltd to acquire its cinema exhibition business, which is operated under the brand name of 'DT Cinemas', on slump sale basis for an aggregate consideration of Rs 500 crore approx.
DT Cinemas, the wholly owned subsidiary of realty firm DLF, has 29 screens with a seating capacity of more than 6,000, while PVR Cinemas has 467 screens in 105 properties in 43 cities.
As a result of the proposed acquisition, PVR will have a presence in 44 cities with 115 multiplexes and 506 screens, PVR said. In November 2009 as well, DLF had signed an agreement with PVR to sell DT Cinemas, but deal fell through in February 2010.
"It has been our strategy to expand our film exhibition business both organically and inorganically over the years. This acquisition is in pursuance of our core strategy to offer a world class cinema experience to the discerning Indian consumer," Ajay Bijli, Chairman cum Managing Director, PVR Ltd said.
Multiplex space has been in consolidation phase in the last one year. In January this year, Mexican multiplex chain operator Cinepolis fully acquired Essel Group's Fun Cinemas for an undisclosed sum.
Prior to that, media and entertainment firm Network18 exited from multiplex business by divesting its stake in Stargaze Entertainment to Carnival Films for an undisclosed sum.
In December 2014, Carnival Group acquired Big Cinemas from Anil Ambani-led Reliance Group for an estimated Rs 700 crore, the biggest ever in this sector.
In July 2014, Inox Leisure acquired Gurgaon-based rival Satyam Cineplexes in a Rs 182-crore deal to strengthen its presence in North India. Shardul Amarchand Mangaldas & Co. was the legal adviser to PVR and EY India and Luthra & Luthra were financial and legal advisers respectively to DLF.
This deal is part of DLF's strategy to exit non-core businesses and cut huge debt of over Rs 20,000 crore.
Commenting on the deal, DLF Sr Executive Director Saurabh Chawla said: The deal is in line with our strategy to focus on our core business and divest non-core businesses or assets...It shall provide the management a more focused approach for enhancing value especially in our retail mall business. The proposed transaction will be subject to approval of applicable statutory and regulatory approvals and satisfaction of customary conditions precedent.