Zee Entertainment merges with Sony India

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). 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. 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.

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.

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