Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced on Wednesday that they have signed a merger deal. According to a press release on the Sony website, the merger will combine both companies’ “linear networks, digital assets, production operations, and program libraries.”
After the merger, Sony will invest $1.57 billion and will be the majority shareholder with a 52.93% controlling stake. The shareholders of ZEEL, meanwhile, will hold a 47.07% stake, according to a regulatory filing by Zee to the stock exchanges.
The merged entity will still be a listed company in India and Punit Goenka, CEO of ZEEL, will continue to be the managing director and CEO of the merged company, as per the transaction.
“The board believes that this merger will further benefit ZEEL. The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes,” a statement from Zee read.
The statement also said that the company not only evaluated financial parameters, “but also the strategic value which the partner brings to the table.” The merger is in line with ZEEL’s strategy of achieving higher growth and profitability as a leading media and entertainment company across South Asia, the statement further added.
The term sheet gives a period of 90 days, during which both firms will conduct mutual diligence and finalise definitive agreements, the release from Sony stated.
Post the announcement of the merger, Zee Entertainment saw a 19% increase in its stock price, according to BSE.
Sony India recently announced that it has several Indian and foreign releases headed for both the big screens and OTT in the next 12 months. The upcoming Sony slate includes Tera Kya Hoga Lovely, starring Ileana D’Cruz and Randeep Hooda, Taapsee Pannu’s Loop Lapeta, Adivi Sesh-starrer Major, Sabir Khan’s Nikamma, under-water thriller Dive, and others.