As reported by us earlier, TV18 Broadcast is snapping up Ramoji Rao-owned Eenadu TV to expand its regional broadcasting presence.

Following a TV18 Broadcast Board of Directors meeting today, Network18 & TV18 have announced the acquisition of ETV Group channels and that RIL Trust would be funding this deal.

According to exchange4media.com, the Board has approved the acquisition of 100 per cent interest in regional news channels in Hindi — ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan and ETV Bihar and ETV Urdu channel (ETV News Channels); 50 per cent interest in ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya (ETV non Telugu GEC Channels).

Ramoji Rao, however, will continue to hold controlling stake in ETV Telugu and ETV2, as TV18 will acquire only 24.50 per cent interest in these channels.

TV18 will have Board and Management Control of ETV News Channels and ETV non Telugu GEC Channels. The Board has approved an outlay of up to Rs. 2,100 crore for this acquisition.

TV18 has an option to buy the balance 50 per cent interest in ETV non Telugu GEC Channels and additional 24.50 per cent interest of ETV Telugu Channels. Which means, Ramoji will continue to hold a majority stake of 51 per cent even in that event in Telugu channels.

RIL Trust is funding this deal for TV18. It might be recalled that Nimesh Kampani, a close aide of Mukesh Ambani bought 40 percent of the shares for Rs 2,600 crores in Ushodaya Enterprises, of which ETV channels are a part. Ramoji had to spend this amount to refund the deposit amounts under Margadarsi Financiers following a RBI order.

Ramoji is divesting a major part of the TV group in order to retain his full control in the company. Reliance’s support to Network 18 makes perfectly dovetails into this scenario.

Earlier, ETV was in talks with Sony but reportedly Sony pulled out of the deal as the global major found the valuation too high. Sony was involved in an all-cash deal but did not agree on the valuation of Rs 2500 crore for the regional entertainment channels. ETV’s annual revenue currently is Rs 500 cr.

The acquisition of ETV Network (TV business) will give TV18 Broadcast a quick presence across all important regional markets of India, barring Tamil Nadu and Kerala, according to Indian Television.com The move will also enable TV18 to compete with Star, Sun and Zee, its biggest rivals.