Zee Entertainment to merge with Sony India: All details here
What's the story
On Wednesday, ZEE Entertainment Enterprises Ltd. (ZEEL) said that its board has given in-principle approval to proceed with a merger with Sony Pictures Networks India (SPNI).
In an exchange filing, ZEE said it has entered a non-binding term sheet with SPNI to combine digital assets, linear networks, production operations, and program libraries from both companies into a single unit.
Here are more details.
Details
ZEE investors have been insistent on board reshuffle
ZEE is a major television broadcasting network in India with a presence in digital media too. The company has reportedly been under pressure from investors like Invesco for a management reshuffle that would include ousting CEO Punit Goenka and three directors from the board.
As part of the transaction, Goenka will, however, continue to be the Managing Director and CEO of the merged entity.
Shares
Sony to hold majority stake in merged entity
Now, SPNI shareholders will reportedly hold a majority stake in the merged entity if the deal goes through. The shareholders are also expected to inject growth capital into SPNI as a part of the merger such that SPNI has approximately $1.575 billion at closing.
This capital would be used to pursue other growth opportunities.
ZEE shareholders will have a 47.07% stake.
Ninety days
Merged entity expected to be publicly listed company in India
According to the aforementioned term sheet, both ZEE and SPNI have been given a 90-day period to conduct mutual diligence and finalize definitive agreements.
According to the exchange filing, the merged entity is expected to be a publicly listed company in India.
Before proceeding, the merger proposal would be put up for a vote of approval from ZEE shareholders.
In better interest
Merger in line with strategy of growth and profitability: ZEE
In the exchange filing, ZEE noted, "The board concluded that the merger will be in the best interest of all the shareholders & stakeholders."
The company continued, "The merger is in line with ZEEL's strategy of achieving higher growth and profitability as a leading media and entertainment company across South Asia."
The transaction remains subject to regulatory and third-party approvals.