As part of the deal, Liberty Interactive, the holding company founded by media mogul John C. Malone, would buy the remaining 62% of HSN that it does not yet own. The company would then merge under the QVC group, although HSN would continue as a separate brand. Leaders expressed enthusiasm for sharing best practices and using each other`s skills. George cautioned, however, that there would likely be “staff reductions, as we are addressing areas of overlap that will likely affect both companies.” America`s two best-known home tv networks, QVC and Home Shopping Network, agreed Thursday to a merger and formed a new retail juggler in an all-out deal worth about $2.1 billion. QVC and HSN employ approximately 27,000 team members in eight countries. Analysts said companies would continue to face competition from people like Amazon.com and a revived Walmart that launched a major online breakthrough. For HSN, the agreement would involve access to a larger market and strengthening the existing portfolio. In the 1980s, QVC and HSN both found loyal supporters among cable TV viewers, but have recently faced challenges in adapting to the online age. Increasingly, they have to turn to cable companies who have abandoned their cable TV subscriptions in favour of watching videos on tablets, computers and smartphones. Leaders argued that both networks would be stronger than one.
Both offer sales on several cable channels and digital platforms and have developed strong niches. With its hosts, QVC has made several characters of beauty and fashion known names, while HSN owns popular lifestyle brands such as Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements as part of its Cornerstone unit. The transaction is expected to be completed by the end of the year, pending regulatory and shareholder approval. It would create the world`s largest television trading company, with $14 billion in revenue, become the third largest e-commerce company in North America and are only Amazon.com and Walmart lagging behind, according to digital research firm eMarketer. In a letter to employees, QVC CEO Mike George, who will lead the new company, said the combination should be able to generate annual cost reductions of between $75 million and $110 million over the next three to five years, and that the money should be used to fund new innovations. Martinez added in a statement: “We are both 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 daily lives, we can jointly develop the next generation of shopping for the next generation of consumers.” We will be able to work more efficiently, eventually combining technology platforms, using our common service and supply chain networks, eliminating redundant and support enterprise services, and negotiating volume-based discounts with our partners,” he wrote. “Both brands already have a large customer base, but the real question will be how they lock their customers into the HSN-QVC ecosystem and prevent them from going to competitors like Amazon,” says Tom Caporaso, Chief Executive of Clarus Commerce, an e-commerce company. “By creating a high-end loyalty program like Amazon Prime, the new convergent brand could become a major threat to Amazon`s visions of total industry dominance.” “Joining the QVC Group will give us immediate access to global consumer markets, a management team with strong global know-how and perspective, and the opportunity to further strengthen our content-based brand portfolios in a changing retail landscape,” said Arthur C.