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QVC to Merge With Home Shopping Network in $2.1 Billion Deal

David Venable, the host of “In the Kitchen With David,” during his QVC show in 2015.Credit...Mark Makela for The New York Times

John C. Malone is solidifying his hold on home-shopping channels — in his own particular way.

His Liberty Interactive, which owns QVC, said on Thursday that it would combine with its longtime rival, the Home Shopping Network, in a $2.1 billion deal.

The deal will put together the two home-shopping television networks at a time of upheaval in the retail world. Amazon’s dominance in selling online has grown seemingly nonstop, while Walmart has made e-commerce a big priority with the purchases of start-ups like Jet and the clothing brand Bonobos.

With e-commerce ascendant, nearly everyone else in the retailing, from venerable department stores to once-trendy clothiers like J. Crew, has been struggling to grow or even survive. A growing number of retailers, from American Apparel to Radio Shack, have filed for bankruptcy protection.

Home-shopping television networks are not immune from the online competition. With their familiar pitches for impulse purchases of electronics, jewelry, makeup and fitness equipment, both QVC and HSN are grappling with ways forward. HSN’s sales declined 3 percent last year, while QVC’s have slowed. In April, Mindy Grossman, HSN’s chief executive since 2008, left to run Weight Watchers International.

Combining QVC and HSN, which also have substantial e-commerce operations, is meant to help them gain scale, combine resources and cut costs. QVC and HSN would remain stand-alone brands under a new QVC Group structure after the merger.

“The increased scale of this combination will allow us to more effectively compete, we think, in a changing and evolving retail and digital environment,” Gregory B. Maffei, the chief executive of Liberty Interactive, said on a conference call with analysts on Thursday.

This being Mr. Malone, however, the deal has a few intricacies.

The deal is an all-stock transaction, where Liberty Interactive is technically buying the 62 percent of HSN that it does not already own.

Liberty Interactive then plans to spin off its nonretail assets, including its stakes in the cable operator Charter and Liberty Broadband, and rename the remaining operations the QVC Group. That publicly traded company would comprise QVC, HSN and Zulily, the flash sale site that Liberty bought for $2.4 billion two years ago.

Such a spinoff is a classic Malone maneuver meant to avoid running up corporate taxes, since shareholders will receive shares in the newly christened QVC Group rather than a cash payout.

It is a tactic that he and Mr. Maffei have employed so frequently that Liberty Media, a related company that Mr. Malone also controls, has completely turned over its asset portfolio at least once.

HSN, based in St. Petersburg, Fla., broadcasts to 95 million households in the United States via cable, as well as online streaming. It also sells home and apparel brands through its Cornerstone business, which markets products through catalogs, branded e-commerce websites, and 14 retail and outlet stores. The Cornerstone brands include Frontgate and Ballard Designs.

The company reported sales of $3.6 billion in 2016, and it employs about 6,900 people.

Under the terms of the transaction, investors would receive 1.65 shares of QVC Series A stock for each share of HSN they own. That would value HSN at $40.36 a share, a 29 percent premium to its closing price on Wednesday.

Shares of HSN were up about 26 percent in afternoon trading on Thursday. Liberty Interactive shares were down more than 1 percent.

HSN shareholders, other than Liberty Interactive, would own 10.6 percent of the combined business.

The transaction is expected to close in the fourth quarter and is subject to shareholder and regulatory approval.

Allen & Company and the law firm Baker Botts are advising Liberty Interactive, while Centerview Partners, Goldman Sachs and the law firm Davis Polk & Wardwell are advising a special committee of HSN’s board of directors.

Follow Chad Bray @Chadbray and Michael J. de la Merced @m_delamerced on Twitter.

A version of this article appears in print on  , Section B, Page 4 of the New York edition with the headline: QVC and Home Shopping Network to Join Forces in $2.1 Billion Merger. Order Reprints | Today’s Paper | Subscribe

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