Liberty Interactive Corporation, parent company to TV shopping network QVC, will acquire rival HSN in an all-stock transaction set to close by the end of this year.
Currently, Liberty owns 38.2% of HSNi’s shares and will purchase the remaining 61.8% for a total of $2.1 billion, pending approval from the FCC and if the deal meets other government regulations like antitrust laws. The companies would then merge under QVC Group.
In acquiring HSNi, a statement from Liberty said it hopes to increase its scale through cost reduction and revenue growth opportunities, optimize programming across five U.S. networks, and better engage existing and potential customers. It also said that it would like to increase its eCommerce and mobile sales, a move industry experts see as a clear effort to compete with Amazon since both companies already have a strong online presence. Last year, HSNi rang in $2.5 billion through online sales alone, while QVC sold $8.6 billion online.
“The addition of HSN will enhance QVC’s position as the leading global video eCommerce retailer. Every year they together produce over 55,000 hours of shoppable video content and have strong positions on multiple linear channels and OTT platforms,” said Greg Maffei, Liberty Interactive President and CEO.
HSNi consists of HSN, a leading interactive multichannel retailer, and Cornerstone, which is comprised of leading home and apparel lifestyle brands including Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements. Post-closing, HSNi headquarters will remain in St. Petersburg and will be overseen by Mike George.
“As the prominent global video commerce retailer and North America’s third largest mobile and eCommerce retailer, the combined company will be well-positioned to help shape the next generation of retailing,” said Mike George, QVC President and CEO.
Allen & Company is serving as financial advisor and Baker Botts LLP is serving as legal advisor to Liberty Interactive. Centerview Partners and Goldman Sachs Group, Inc. are serving as financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to the Special Committee of the Board of Directors of HSNi.