Lagatar24 Desk
New Delhi, Dec 22: In the midst of a protracted boardroom and courtroom conflict between Zee’s founders and its major shareholder, Zee Entertainment Enterprises Ltd., India’s largest listed television network, agreed for a merger with Sony Group Corp.’s local unit.
Zee Entertainment Enterprises Ltd. (ZEEL) and Sony Pictures Networks India Pvt Ltd. (SPNI) announced on Wednesday that they had signed definitive agreements to merge ZEEL and SPNI, combining their linear networks, digital assets, production operations, and programme libraries.
According to a statement to the stock exchanges, the agreements follow the conclusion of a discussion phase during which ZEEL and SPNI completed reciprocal due diligence.
According to a filing by Zee on Wednesday, Sony Pictures Networks India Pvt. will control 50.86 percent of the amalgamated corporation, while Essel, Zee’s present holding company, will possess 3.99 percent. As part of the formal agreement, public shareholders will receive the remaining 45.15 percent.
According to the filing, Zee’s board of directors accepted the appointment of Punit Goenka, the son of founder Subhash Chandra, as the new entity’s chief executive officer.
The deal will help Sony develop its media business in the world’s second-largest country, where Zee controls 17% of the media and entertainment market. The agreement comes three months after a non-binding agreement between Zee and Sony was made public on September 22, escalating a takeover war between Chandra’s family and Atlanta-based Invesco Developing Markets Fund, which owns 18 percent of the company and controls the majority of the shares.
Now, Punit Goenka will serve as the managing director and CEO of the amalgamated business. The Sony Group will nominate majority of the combined company’s board of directors, which will include N.P. Singh, the present SPNI managing director and CEO. After the transaction closes, Singh will become chairman of Sony Pictures India (a SPE business), reporting to Ravi Ahuja, SPE’s head of Global Television Studios and SPE corporate development.
“It is a significant milestone for all of us, as two leading media & entertainment companies join hands to drive the next era of entertainment filled with immense opportunities. The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms,” Goenka said in a statement.
The united business, which will operate 75 television stations, two video streaming services, two film studios, and a digital content studio, is expected to be a powerful contender, according to media analysts.
