Sony Pictures Networks India Private Ltd. (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) have agreed to merge ZEEL with and into SPNI and combine their linear networks, digital assets, production operations and program libraries.
After closing, the new combined entity will be listed publicly in India.
What is a merger?
As per law, the joining together of two corporations in which one corporation transfers all of its assets to the other, which continues to exist is called a merger.
As per the terms of the definitive agreements. SPNI will have a cash balance of $1.5 billion at their closing, including through infusion by the current shareholders of SPNI and the founders of ZEEL.
SPNI is an indirect subsidiary of Sony Pictures Entertainment Inc. (SPE).
Post-merger SPE will indirectly hold a majority of 50.86% of the combined company. ZEELs founders will own 3.99%, and the other ZEEL shareholders will have a stake of 45.15%.
Punit Goenka of ZEEL will lead the combined company as its Managing Director & CEO. The majority of the board of directors of the merged entity will be nominated by the Sony Group and will include the current SPNI MD N.P. Singh.
Mr Singh will assume a broader executive position at SPE as Chairman, Sony Pictures India, reporting to Ravi Ahuja, SPEs Chairman of Global Television Studios.
ZEELs founders have agreed to limit the equity, they may own in the combined company to 20% of its outstanding shares.
It is a significant milestone for all of us, as two leading media & entertainment companies join hands to drive the next era of entertainment, said Mr Goenka.
He also added: The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices.
