In the days before Amazon became a juggernaut and eBay had taken off in the online marketplace, shopping from home meant tuning into dedicated TV programs and buying up the products they had on display.
Now, two of the biggest rivals in that industry will be merging. QVC announced on Thursday that it will be combining with the Home Shopping Network in an all-stock deal worth $2.1 billion, according to The New York Times. The deal will give Liberty Interactive Corporation, QVC’s parent company, an additional 62% of shares in HSN Inc., which expands on the 38% of shares it already owned.
“We are excited to announce the acquisition of HSNi. The addition of HSN will enhance QVC’s position as the leading global video eCommerce retailer,” said Liberty Interactive President and CEO Greg Maffei in a press release.
Liberty Interactive is hoping that its acquisition of HSN will help increase QVC’s scale and make it more competitive in an ever-changing retail marketplace. QVC President and CEO Mike George says that the merger will also benefit consumers.
“By creating the leader in discovery-based shopping, we will enhance our customer experience, accelerate innovation, leverage our resources and talents to further strengthen our brands, and redeploy savings for innovation and growth,” he said. “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.”
However, the newly formed entity may still face a tough road if sales continue to move to online retailers. HSN’s sales declined by 3% last year alone, and sales at traditional brick-and-mortar locations continue to fade.
As part of the deal, investors will receive 1.65 shares of QVC Series A stock for each stock of HSN stock they own, which comes out to around $40.36 per share as of closing time on Wednesday. The new QVC Group will also acquire flash sale website zulily as part of the transaction.
The deal is expected to close in the last quarter of 2017 pending a regulatory review by the Federal Communications Commission (FCC).