The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have approved the proposed merger between ZEE and Culver Max Entertainment, formerly Sony Pictures Networks India (SPN).
According to a statement from ZEE, approvals mark a “firm and positive step” in the entire merger approval process and give the company permission to go on to the process’ subsequent stages. The National Company Law Tribunal (NCLT) and other regulatory approvals will be requested by the two companies, who had already applied for clearance from the Competition Commission of India (CCI).
On December 22 of last year, ZEE and SPN officially agreed to merge their businesses. ZEE and SPN will combine as part of the proposed merger, and after it closes, the combined business will list on Indian stock exchange. According to the provisions of the formal agreements, SPN will have $1.5 billion in cash on hand (assuming an INR to USD conversion rate of 75:1) at closing, primarily due to an investment from the company’s current shareholders and the promoters of ZEE.
In accordance with a non-compete agreement, SPE will pay the founder promoters of ZEE Rs 1101.31 crore as a non-compete fee. The promoters will use this money to inject primary equity capital into SPN, giving them the right to purchase an additional 2.11 percent of the combined company’s shares. SPE will hold 50.86% of the combined company after the merger, while ZEE promoters would hold 3.99%.
Existing ZEE shareholders will own 45.15 percent of the combined company’s shares. Punit Goenka, MD & CEO of ZEE, will serve as the MD & CEO of the combined business, according to the agreement. There will be nine directors on the board; five of them will be chosen by the Sony Group, and the remaining three will be independent.