Discovery Network Call's Off To Buy Food Food Channel

[Umair Malik]

MUMBAI: Seven months after signing an agreement to gobble up Chef Sanjeev Kapoor’s culinary channel FoodFood, Discovery Communications has decided to walk out on the deal.

Discovery’s refusal to take a bite means that FoodFood will be left with Indian owners Kapoor and Sandeep Goyal.

Though marginally profitable, funding the food speciality network’s expansion is going to be an issue. Malaysia-based Astro has already exited the venture, a source said.

The shares of Turmeric Vision, the company which owns and operates FoodFood, have been transferred to Kapoor and Goyal. While Kapoor owns 80% stake in Turmeric Vision, 20% rests with Goyal. “Astro has sold its stake in Turmeric Vision. The shares have been transferred to Kapoor and Goyal,” the source added.

Earlier, Astro held 73% stake in Turmeric Vision while Kapoor and Goyal’s Mogae Consultants owned the remaining stake. The deal with Discovery involved a two-way process. Initially, Kapoor and Goyal were to buy out Astro’s stake in Turmeric Vision.

The shareholding would change to 80% in favour of Kapoor while Goyal would own the remaining portion. Discovery would subsequently buy out the shares of Goyal and acquire a major chunk of Kapoor’s holding. In the new structure, Discovery would own 74% stake and Kapoor the remaining 26%.

“At this time, we can confirm that we are not entering into the partnership with FoodFood as announced earlier this year. India remains a global priority market for Discovery, and we will continue to explore opportunities as we expand our business and accelerate our strategic growth investments here,” a Discovery spokesperson said.

Discovery did not explain why it was calling off the acquisition. After announcing the deal in May, Discovery had started the integration process.

The distribution and ad sales functions were moved to the Discovery team. The acquisition of FoodFood would have meant Discovery having two channels in the lifestyle genre. The global conglomerate owns TLC, which competes with a breed of homegrown lifestyle channels including NDTV Good Times and Essel Group’s Living Foodz.

The purchase of FoodFood would have given Discovery a local channel in the food genre. Astro had invested $30 million in Turmeric Vision. In FY15, Turmeric Vision reported a loss of about Rs 10 crore (Rs 100 million) on a turnover of Rs 30 crore (Rs 300 million). Incidentally, this marks Discovery’s new India head Karan Bajaj’s first major decision since he assumed office in October this year.