Lagatar24 Desk
Zee Entertainment and Sony Pictures Networks India are going to merge. The Board of Directors of Zee Entertainment Enterprises has approved the agreement between ZEE and SPNI (Sony Pictures Networks India). The Board believes that this merger will prove beneficial for both the shareholders and the stakeholders. The effect of this deal is visible on the stock of Zee Entertainment. The company’s stock is trading with a gain of more than 23% on NSE.
Under this agreement, the company and Sony India will merge. The promoters of Sony India will also infuse growth capital into the company as part of the merger agreement. Shareholders of Zee Entertainment will hold 47.07% in the merged company. Whereas Sony Pictures Networks will hold 52.93% in the merged company.
The company has also said that Puneet Goenka will be the MD and CEO of the company after the merger for the next 5 years. Sony Group will have the right to nominate a majority director in the merged company.
According to the information, after this merger, Sony Pictures Entertainment is going to invest $ 1575 million (about Rs 11,605 crore). After the merger, Sony Entertainment will be the majority shareholder. A non-binding term sheet has been signed between both parties and both the parties will do due diligence within 90 days. Interestingly, even after this merger, the company will be listed in the Indian stock market and a non-compete agreement will also be signed between the two parties.
“Zee’s business has seen steady growth. The company’s board is confident that this merger will further benefit Zee. The coming together of both the companies will give a new energy to the company. This will also give a big benefit to the shareholders of the company” R Gopalan, Chairman, Zee Entertainment Enterprises.
Both companies will benefit from this deal. Both companies will be able to access each other’s content and digital platforms. ZEEL will get growth capital, while Sony will get a viewership of 130 crore people through ZEEL.
