Moneycontrol PRO
UPCOMING EVENT:Attend Traders Carnival Live. 3 days 12 sessions at Rs.1599/-, exclusive for Moneycontrol Pro subscribers. Register now!

Zee Entertainment approves in-principle merger with Sony Pictures India

Sony Pictures will hold a majority stake in the proposed merged entity, which will be headed by Zee’s Punit Goenka

September 22, 2021 / 09:52 AM IST

Zee Entertainment Enterprises said its board approved the merger of the company with Sony Pictures Networks India (SPNI), in line with its strategy of achieving higher growth and profitability as a leading media and entertainment company across South Asia.

“The shareholders of SPNI will hold a majority stake in the merged entity,” Zee said in a stock exchange filing on September 22. “The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately $1.575 billion at closing for use in pursuing other growth opportunities.”

Read | Merger with ZEE in line with company's vision: Sony Pictures CEO tells employees

Following the proposed merger, SPNI shareholders will hold a 52.93 percent stake in the combined entity and Zee shareholders will own a 47.07 percent stake. Punit Goenka will continue to be the managing director and CEO of the merged entity.

The Sony Group will have the right to nominate majority directors on the board of the merged entity.

Close

Also read | Zee-Sony Pictures deal takes care of all stakeholders: Sources

The Zee board of directors, which met on September 22, approved the execution of a non-binding term sheet with SPNI in relation to a potential transaction involving a composite scheme of arrangement for the merger of the company and Sony India and infusion of growth capital by the promoters of Sony India into Sony India as part of the merger, Zee said in the filing.

As a part of the transaction, Zee and SPNI will combine their linear networks, digital assets, production operations and programme libraries.

Also read: After Zee & Dish TV, promoters set to face investor ire in Zee Learn, Zee Media now

According to the term sheet, Zee’s promoter family is free to increase its shareholding from the current 4 percent to up to 20 percent.

“ZEEL continues to chart a strong growth trajectory and the board firmly believes that this merger will further benefit ZEEL,” R Gopalan, chairman of Zee Entertainment, said in the statement. “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.”

The announcement comes a week after activist Zee shareholders made an open call for the ouster of promoters and the incumbent management led by Goenka.

Read | Like father, unlike son: Punit Goenka’s bumpy ride at the Zee Group

Proxy advisory firm Ingovern had raised concerns over the role of the audit committee headed by Goenka after the company’s biggest shareholder – Invesco Developing Markets Fund and OFI Global China Fund – called for his removal.

Goenka was appointed a member of the audit committee from March 17, 2021, replacing Ashok Kurien and Manish Chokhani, who resigned from the board of the company ahead of its annual general meeting on September 14.

It was strange that the board allowed the induction of a promoter executive director into the audit committee, Ingovern said in a note on September 14.
Moneycontrol News
first published: Sep 22, 2021 07:54 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark