In a deal that will bring together two longtime home shopping rivals, QVC is acquiring the Home Shopping Network.
Liberty Interactive Corp., owner of QVC, currently owns 38.2% of HSN parent HSNi. Under the agreement announced Thursday, Liberty will acquire the remaining 61.8% stake, making HSNi a wholly-owned subsidiary. The all-stock transaction has an enterprise value of $2.6 billion.
"The addition of HSN will enhance QVC’s position as the leading global video e-commerce retailer," said Greg Maffei, president and CEO, Liberty Interactive. "Every year they together produce over 55,000 hours of shoppable video content and have strong positions on multiple linear channels and OTT platforms."
Both QVC and HSN have been challenged in recent years amid a decline in traditional TV viewership and the rise of online shopping. Combing the two companies will allow them to benefit from economics of scale, cut costs and compete better against such retail giants as Amazon and Walmart. The two companies together will rank as the third largest mobile and e-commerce retailer in North America, according to QVC.
HSNi consists of HSN and Cornerstone, whose retail brands include 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, president and CEO of QVC.
Once the deal is completed, Liberty Interactive plans to spin off its nonretail assets and rebrand the remaining operations as the QVC Group, the New York Times reported. It will be comprised of QVC, HSN and flash sale site Zulily, which will all remain standalone brands under the QVC Group umbrella. The combined company is expected to have approximately $14 billion in revenue.
The deal comes on the heels of the departure in May of HSN CEO Mindy Grossman, who left the company after 11 years to become president and CEO of Weight Watchers International.
"Joining the QVC Group will give us instant access to global consumer markets, a leadership team with deep expertise and a global perspective, and the opportunity to further strengthen our content-based brand portfolios in a changing retail landscape,” said Arthur C. Martinez, chairman, HSNI. “We have both been innovators in a growing and dynamic retail environment with a unique vision of what shopping should be, and as new technologies continue to change our everyday lives, together we can develop the next generation of shopping for the next generation of consumers.”