NEW DELHI: The Board of Zee Entertainment has unanimously given in-principal approval to the merger between Zee Entertainment and Sony Pictures Networks India (SPNI) after several months of hectic deliberations. According to the deal, Sony Pictures Entertainment will infuse USD 1.575 billion in the merged entity. Punit Goenka will continue as MD & CEO of the merged entity.
While giving its in-principal nod to the deal, the ZEE Board said that it evaluated not only on financial parameters but also on the strategic value which the partner brings to the table.
The Board concluded that the “merger will be in the best interest of all the shareholders and stakeholders and it is in line with ZEEL’s strategy of achieving higher growth and profitability as a leading Media & Entertainment Company across South Asia.”
Post-merger between Zee Entertainment and Sony Pictures Networks India, 47.07% stake will be held by shareholders of Zee Entertainment, while Sony Pictures Networks will hold a 52.93% stake in the merged entity. The merged entity will be a publicly listed company.
Both companies have agreed to combine linear networks, digital assets, production operations and program libraries as part of the deal. Further, certain non-compete arrangements will be agreed upon between the promoters of ZEEL and the promoters of SPNI.
ZEEL & SPNI have entered into an exclusive non-binding term sheet. Both the companies will conduct a due diligence process over the next 90 days. Meanwhile, the existing promoter family of Zee will have the option to increase shareholding from the current 4% to up to 20% in the normal course of business, the deal mentioned.
he majority of the Board of Directors of the merged entity will be nominated by Sony Group, as per the deal. It is anticipated that a final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third-party approvals, including the votes of ZEEL’s shareholders.
ZEEL is well known for its strong expertise in content creation and its deep consumer connect established over the last 3 decades, coupled with SPNI’s success across entertainment genres (including gaming and sports), the merger is expected add immense value to the merged entity and its management team, thereby increasing shareholder value multifold.
“The Board of Directors at ZEEL have conducted a strategic review of the merger proposal between SPNI and ZEEL. As a Board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and the Company. We have unanimously provided an in-principal approval to the proposal and have advised the management to initiate the due diligence process. ZEEL continues to chart a strong growth trajectory and the Board firmly believes that this merger will further benefit the Company. The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of the Company for their approval,” R. Gopalan, Chairman, ZEE Entertainment Enterprises Ltd. said.