Zee Entertainment Enterprises Ltd (ZEEL) announce that its board of directors have unanimously given in-principle approval for the merger between ZEEL and Sony Pictures Networks India (SPNI) on 22nd September 2021.
Punit Goenka will continue to be the Managing Director (MD) and CEO of the merged ZEEL-SONY.
The merged entity will be publicly list in India.
R Gopalan, Chairman, Zee Entertainment Said :
ZEEL continues on a strong growth trajectory and the Board strongly believes that this merger will benefit ZEEL.
The merger will boost business growth and also enable shareholders to benefit from its future successes, said Gopalan.
Details of ZEEL-Sony India Merger
Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India (SPNI) have enter into a non-binding term sheet to combine the production operations, linear networks, program libraries, and digital assets of both companies.
Sony India will effect a growth capital into ZEEL as a part of the merger so that it has approximately $1.575 billion at the time of closing.
Base on the existing estimated equity values of ZEEL and Sony India indicative merger ratio would have been at 61.25% in favour of ZEEL.
The propose effect of growth capital by Sony India the merger ratio of ZEEL will be 47.07% while Sony India will hold a majority stake of 52.93%.
Sony India will have the right to appoint a majority of the board of directors in the merge entity.
ZEEL and Sony both have agree to a binding exclusivity for a period of 90 days during which definitive and further non-compete agreements will be conduct and finalized.
The promoters of ZEEL and Sony India can increase the shareholding from the current 4% to 20% in accordance with applicable law.
Plan of ZEEL-Sony India Merger
ZEEL said that the Board of Directors at ZEEL have carry out a strategic review of the merger between ZEEL and Sony India.
Board of Directors have evaluate both the financial and strategic values that Sony India brings to the merger.
The Board of Directors of ZEEL states that the merger will be beneficial to all shareholders and stakeholders.
ZEEL-Sony India merger is in accordance with the strategy of ZEEL which is achieving higher growth and profitability as a leading media and entertainment company across South Asia.
The deep consumer connect and strong expertise in content creation of ZEEL over the past 3 decades with the success of Sony India across entertainment genres including sports and games will boost the value of the merge entity and its shareholders for sure.
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