Zee Entertainment on July 29 received approval from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for its proposed merger with Culver Max Entertainment Private Limited, formerly known as Sony Pictures Networks India Private Limited (SPNI).
The approvals permit the media company to proceed with the next steps in the overall merger process. The composite scheme of arrangement remains subject to applicable regulatory and other approvals, Zee said in a statement.
It added that the approval from the stock exchanges marks a firm and positive step in the overall merger approval process.
Zee and Sony announced their merger on September 22 last year. After a 90-day period to conduct due diligence for the process which ended on December 21, the Board of Directors of Zee approved the merger with SPNI.
The Board had then said that while Sony will hold a 50.86 percent stake in the merged entity, promoters of ZEEL will hold 3.99 percent, and the other ZEEL shareholders will hold a 45.15 percent stake in the combined company.
Under the terms of the definitive agreements signed to merge ZEEL with and into SPNI, Sony will have a cash balance of $1.5 billion to enable the combined company to drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities, Zee had said at the time of Board's approval for the merger.
According to analysts, the merger is significant as the coming together of Zee and Sony will bring tremendous synergies between the two companies that will exponentially grow the business and the sector.
Experts had also pointed out that the merger will create the largest entertainment network in India with a 26 percent viewership share and that the consolidation is a big positive as the merged entity will become a serious contender to replace market leader Star and Disney in the medium to long term.
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