Sony Zee merger: Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) announced on December 21, 2021 that they have signed definitive merger agreements to combine their linear networks, digital assets, production operations and program libraries.
Under the agreement, Zee Entertainment will be merged with Sony Pictures Networks to form a new combined company. The agreement comes after the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence.
The newly merged entity will be publicly listed in India after the closing of the deal, which is subject to certain customary closing conditions, including regulatory, shareholder and third party approvals.
Sony Zee Merger: All you need to know
Under the merger deal, Sony Pictures Networks India will have a cash balance of USD 1.5 billion at closing. The current shareholders of SPNI and founders of ZEEL will infuse growth capital into the new merged entity.
The merged entity will aim to drive sharper content creation across platforms and strengthen its footprint in the rapidly evolving digital ecosystem.
Sony India will infuse a growth capital into ZEEL as a part of the merger so that it has approximately $1.575 billion at the time of closing. Based on the existing estimated equity values of ZEEL and Sony India, the indicative merger ratio would have been at 61.25 percent in favour of ZEEL.
Who will own how much stake?
Sony Pictures Entertainment Inc. (SPE) will own around 50. 86 percent stake in the new merged entity, while Zee founders will own a 3.99 percent stake. The remaining 45.15 percent stake will be held by public shareholders.
New merged company composition
Managing Director & CEO- Punit Goenka
Puneet Goenka will continue to remain as the MD and CEO of the merged entity for a period of five years as part of the deal.
Board of Directors
The newly merged company will have a 9-member board and Sony will have the right to nominate the majority of directors. SPNI is expected to have five directors in the board, out of the total 9.
Few of them are mentioned below-
N.P. Singh- Current SPNI Managing Director and CEO ( He will assume a current SPNI Managing Director and CEO)
Tony Vinciquerra- Chairman and CEO of Sony Pictures Entertainment (SPE)
Ravi Ahuja - Chairman, Global Television Studios and SPE corporate development
Erik Moreno- Executive vice-president, corporate development and M&A, SPE.
Puneet Goenka will be the only ZEE executive to have a board seat.
Significance
Sony Zee merger is expected to achieve business synergies and it could be well-positioned to meet growing consumer demand for premium content across entertainment touchpoints and platforms.
The combined company will function under the stewardship of the Sony Group, a global leader in consumer technologies, gaming and entertainment, to be able to better compete with the world’s largest streaming players.
What is SPNI?Sony Pictures Networks India Private Limited (SPNI) is an indirect subsidiary of Sony Pictures Entertainment Inc. (SPE). Under the current agreement, SPE, will pay a non-compete fee to founders of ZEEL through a subsidiary, which will be used by them to infuse primary equity capital into SPNI, entitling ZEE founders to acquire shares of SPNI. |
Background
The Zee Entertainment Enterprises Ltd (ZEEL) announced on September 22, 2021 that its board of directors have unanimously given in-principle approval for the merger between ZEEL and Sony Pictures Networks India (SPNI).
The companies had announced the merger on September 22, 2021 and there was a 90-day due diligence period for the merger deal, which came to a close on December 21, 2021.
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