Zee Entertainment merges with Sony Pictures, Punit Goenka MD and CEO of conglomerate

As per the deal, Sony Pictures Networks will hold a majority stake in the merged entity and infuse US$ 1.75 billion.

"The shareholders of SPNI will hold a majority stake in the merged entity. The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately USD1.575 billion at closing, for use in pursuing other growth opportunities," Zee Entertainment said in a BSE filing.

Post merger, Zee Entertainment stakeholders would hold 47.07% equity stake in the merged entity while Sony Pictures Networks will hold the balance 52.93% in the merged entity.

As per the term sheet of the merger, Punit Goenka will continue to be the Managing Director and CEO of the merged entity. Further, certain non-compete arrangements will be agreed upon between the promoters of ZEEL and the promoters of SPNI.

Investors gave thumbs-up to the deal with ZEEL stocks opening 9.99% higher at Rs 281.20 a piece on the BSE.

ZEEL and SPNI have entered into a non-binding term sheet to combine both companies' linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalize a definitive agreement.

The merged entity will be a publicly listed company in India.

ZEEL and SPNI have entered into a non-binding term sheet to combine both companies' linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalise a definitive agreement.

"It is anticipated that the final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third party approvals, including the votes of ZEEL's shareholders," said the leading content company in the stock exchange filing.

R Gopalan, Chairman, ZEEL said that the company Board of Directors have conducted a strategic review of the merger proposal between SPNI and ZEEL.

"As a Board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and ZEEL. We have unanimously provided an in-principle approval to the proposal and have advised the management to initiate the due diligence process," he said.

"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," Gopalan added.