The two best-known home-shopping TV networks in America, QVC and Home Shopping Network, agreed to merge Thursday, forming a new retail juggernaut as part of an all-stock deal valued at about $2.1 billion.
Under the agreement, QVC’s parent firm, Liberty Interactive, the holding company founded by billionaire media mogul John C. Malone, would buy the remaining 62 percent of HSN that it does not already own. The entity would then combine under QVC Group, though HSN would continue as a separate brand.
The transaction is set to be finalized by the end of the year, pending regulatory and shareholder approval. It would create the largest television commerce company in the world, with $14 billion dollars in revenue, and become the third-largest e-commerce company in North America, lagging behind only Amazon.com and Walmart, according to the digital research firm eMarketer.
QVC and HSN both found loyal followings among early cable television viewers in the 1980s but have more recently faced challenges adapting to the online age. Increasingly, they must appeal to cord-cutters who have given up their cable television subscriptions in favor of watching videos on tablets, computers and smartphones.
Executives argued that the two networks would be stronger as one. Both offer sales over multiple cable channels and digital platforms and have developed strong niches. With its chipper hosts, QVC has made several beauty and fashion pitch-people household names, while HSN owns popular home and apparel lifestyle brands such as Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements as part of its Cornerstone unit.
Together, the two companies count 23 million customers — though there may be some overlap — and 2 billion website visits, and they combine for 320 million packages shipped annually.
QVC and HSN employ about 27,000 team members in eight countries.
In a letter to employees, QVC chief executive Mike George, who will lead the new company, said the combination should be able to generate between $75 million to $110 million in annual cost reductions within the next three to five years, and that money would be used to fund new innovations.
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