Zee has surprised everyone in the media and entertainment landscape by striking a surprising merger deal with Sony Pictures Networks (SPN) India. Zee has successfully fended off a bid by its largest investor Invesco to oust Punit Goenka as the managing director of the company.
If the deal goes through it will create India’s second-largest entertainment network by revenue and spawn an entity with 75 TV channels, two video streaming services (ZEE5 and Sony LIV), two film studios (Zee Studios and Sony Pictures Films India) and a digital content studio (Studio NXT).
The deal will be the largest such transaction in the Indian media and entertainment space.
Under the terms of the nonbinding agreement, SPN will infuse growth capital of $1.575 billion (Rs 11,615 crore) and end up with a 52.93% stake in the merged entity, while ZEE shareholders will own the remaining 47.07%
The merger proposal proposes that Goenka stay as MD and CEO of the merged entity for at least five years after completion of the deal. The majority of the board will be nominated by Sony Group and NP Singh, MD and CEO of SPN, is likely to be on the board.
“I am pleased to announce that Sony Pictures Networks India (SPNI) has entered into an exclusive, non-binding term sheet with Zee Entertainment Enterprises Ltd (ZEEL) to combine both companies’ linear networks, digital assets, productiion operations, and programme libraries,” Ravi Ahuja, chairman of Global Television Studios and Sony Pictures Entertainment Corporate Development, wrote in an internal mail to employees that ET has seen.
“The board of directors at ZEE has conducted a strategic review of the merger proposal between SPN and ZEE,” ZEE chairman R Gopalan said in a company release. “We have unanimously provided in-principle approval to the proposal and have advised the management to initiate the due diligence process.”
Source: The article has been published by The Economic Times with minor edits by the ArdorComm News Network Team.