CJ O’Shopping announced on Sept. 29 that Shop CJ, the Korean firm’s Indian affiliate, has merged with local home shopping giant HomeShop18.
The Indian firm took over the shares of Shop CJ -- 50 percent stake of CJ O’Shopping and the rest of US private equity firm Providence Equity Partners. In exchange, the Korean firm has received new shares issued by HomeShop18.
After the deal, CJ O’Shopping has become one of the main shareholders with 12.5 percent stake and also been given rights to appoint one director on the board. The US PEF also owns 12.5 percent shares of the Indian home shopping firm.
HomeShop18 is a leader in Indian home shopping industry selling products worth more than 220 billion won (US$192.08 million) last year.
Shop CJ was jointly established with India media firm Star India in 2009. Although the firm became the runner-up in the market by selling products worth around 80 billion won last year, it experienced some financial difficulties. Its Indian unit reported combined losses of 60.3 billion won over the last four years, which is the largest among its units overseas, largely due to fierce competition in the Indian market.
“It is true that our business in India was not doing well, so we decided to work together with the top firm in the country,” a company spokesperson told The Investor.
“We expect to sell products worth over 300 billion won (after the merger).”
By Song Seung-hyun (email@example.com)