The new combined executive team will be led by Video Island CEO Simon Calver, while LoveFilm's CEO MarkLivingstone will step down from his post and serve as a consultant once themerger is completed.
"Both companies wereincredibly successful at what they did," Calver told ScreenDaily.com. "
The combined company will have about 300 employees. Calversaid that it was "early days" in terms of staffing decisions but that therewouldn't be large-scale redundancies.
Both companies were founded in 2003. In the year that ended December 2005, sales of the combined groupwere more than $43.7m (£25m) and thegroup turned profitable in December.
The combined company will have more than 400,000 subscribers and amarket share of about 17% of all UK
Calver said that likely territories for expansionwould include
Calver noted that they settled on the LoveFilm brand name because "thinking about international expansion, the words 'love' and 'film' areubiquitous across the world."
After the merger, the company will offer
In recent months, LoveFilm had ramped up itsvideo-on-demand business, including a recent download-to-own deal withUniversal UK. Arts
The combined company's investors include LoveFilm'smajority shareholder Arts Alliance Media and
During the merger talks, both companies were advisedby investment bank Altium. The deal is subject toshareholder approval but Calver said he hoped itwould be completed quickly.
The management team willalso include LoveFilm's current marketing directorSimon Morris, who will serve as group marketing director. ScreenSelectco-founders William Reeve and Alex Chesterman willserve as
Added LoveFilm's Livingstone: "I am privileged to have led the creation of LoveFilm over the last two years. The new combinedmanagementrepresents a world class teamand I believe thecompanywill now become a major force to be reckoned with in theentertainment world."