Zee Entertainment's board of directors approved the merger between Sony Pictures Networks India and Zee Entertainment Enterprises Limited (ZEEL), according to a regulatory filing by the media company to the stock exchanges on Wednesday, December 22.
Sony Pictures Networks India (SPNI) will hold a majority stake of 50.86 percent stake in the merged entity. The promoters of ZEE Entertainment will hold 3.99 percent, and the other ZEE shareholders will hold a 45.15 percent stake in the company - which is set to be one of the largest entertainment networks in the country.
The deal entails the merging of television channels, film assets, and streaming platforms of the two rival channels. The combined entity will include popular channels such as Sony MAX and Zee TV, along with streaming platforms ZEE5 and SonyLIV.
Mr Punit Goenka will continue to be the Managing Director (MD) and CEO of the merged entity. The majority of the board of directors of the combined company will be nominated by the Sony Group and will include the current SPNI Managing Director and CEO, Mr. N.P. Singh.
“.....two leading media and entertainment companies join hands to drive the next era of entertainment filled with immense opportunities. The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms,'' said Mr. Punit Goenka, MD & CEO, ZEE Entertainment Enterprises.
Under the terms of the signed definitive agreements, Sony will have a cash balance of $1.5 billion to enable the combined company to drive sharper content creation across platforms, strengthen its footprint in the digital ecosystem, bid for media rights in the sports landscape, and pursue other growth opportunities.
''The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence. After closing, the new combined company will be publicly listed in India,'' said ZEE Entertainment in its regulatory filing today.
The merger between the two entities was announced on September 22. During the 90-day due diligence period of the deal, Zee's largest shareholder Invesco had raised concerns regarding the possibility of increasing the promoter group's stake to 20 percent in the proposed Zee-Sony merged entity.