A key merger deal in the Indian media sector is almost finalized. Leading media house Zee Entertainment Enterprises Limited (ZEEL) and Sony Pictures Networks India (SPNI) have signed a merger agreement. The Board of Directors of ZEEL unanimously provided an in-principle approval for the merger between SPNI & ZEEL.
Zee Entertainment will have a 47.07 per cent stake in the company after the merger, while SPNI holds a 52.93 per cent stake. According to the agreement, Sony Pictures will invest $1.575 billion after the merger.
Punit Goenka, who is currently the CEO of Zee, will be the MD and CEO of the merged company for five years. Zee Board said that apart from the financial aspects, the strategic value of the partnership with Sony has also been taken into consideration. He said the deal would help it become the leading media and entertainment company in South Asia. Also, the company revealed that it is profitable for the shareholders.
The two companies now share affairs such as Linear Networks, Digital Assets, Production Operations and Program Libraries. The term sheet gives a period of 90 days, during which both firms will conduct mutual diligence and finalize definitive agreements, the filing said.
According to the agreement, Sony Group will appoint most of the directors on the board that will be formed after the merger.
Zee has good experience in content creation as well as reaching out to users over the past three decades. On the other hand, Sony has had splendid success in the entertainment sector, such as gaming and sports. In this context, it is expected that the merger will add to the company’s popularity and strategic value.
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