Zee Entertainment merges with Sony India, know details here

Sony and Zee Merger: The Board of Directors of ZEEL unanimously gave in-principle approval for the merger between ZEEL and Sony Pictures Networks India (SPNI). Know details here.

Created On: Sep 22, 2021 13:25 IST
Zee Entertainment, Source: ANI
Zee Entertainment, Source: ANI

Sony and Zee Merger: The Zee Entertainment Enterprises Ltd (ZEEL) on September 22, 2021, announced that its board of directors have unanimously given in-principle approval for the merger between ZEEL and Sony Pictures Networks India (SPNI). Punit Goenka will continue to be the Managing Director (MD) and CEO of the merged ZEEL-SONY. The merged entity will be publicly listed in India.

R Gopalan, Chairman, Zee Entertainment said that ZEEL continues on a strong growth trajectory and the Board strongly believes that this merger will benefit ZEEL. The merger will boost business growth and also enable shareholders to benefit from its future successes, said Gopalan.

ZEEL-Sony India merger – Key points

Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India (SPNI) have entered into a non-binding term sheet to combine the production operations, linear networks, program libraries, and digital assets of both companies.

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 per cent in favour of ZEEL.

However, with the proposed infusion of growth capital by Sony India, the merger ratio of ZEEL will be 47.07 per cent while Sony India will hold a majority stake of 52.93 per cent in the merged entity. Sony India will have the right to appoint a majority of the board of directors in the merged entity.

ZEEL and Sony both have agreed to a binding exclusivity for a period of 90 days during which definitive and further non-compete agreements will be conducted and finalized. The merged entity will be publicly listed in India.

As per the term sheet, the promoters of ZEEL and Sony India can increase the shareholding from the current 4 per cent to 20 per cent in accordance with applicable law.

Strategic and business value of ZEEL-Sony India merger

ZEEL stated that the Board of Directors at ZEEL have carried out a strategic review of the merger between ZEEL and Sony India. They have evaluated both the financial and strategic values that Sony India brings to the merger. The Board of Directors of ZEEL stated that the merger will be beneficial to all shareholders and stakeholders.

The ZEEL-Sony India merger is in accordance with the strategy of ZEEL which is achieving higher growth and profitability as a leading media and entertainment company across South Asia.

The deep consumer connect and strong expertise in content creation of ZEEL over the past 3 decades when coupled with the success of Sony India across entertainment genres including sports and games will boost the value of the merged entity and its shareholders significantly.

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