Zee Entertainment Enterprises Ltd. (ZEEL) and Sony Pictures Networks India Private Limited (SPNI) have announced that they have inked definitive agreements to merge ZEEL with and into SPNI,
combining their linear networks, digital assets, production operations and program libraries.
On Wednesday, in the midst of a tangled boardroom and courtroom conflict between Zee's founders and its largest shareholder, India's largest listed television network, Zee Entertainment
Enterprises Ltd., approved a merger agreement with Sony Group Corp.'s local unit.
According to a filing by Zee on Wednesday, Sony Pictures Networks India Pvt. will control 50.86 percent of the merged entity, while Essel (Zee's current holding company) will possess
3.99 percent. As part of the formal agreement, public shareholders will have the remaining 45.15 percent.
Punit Goenka, the son of Zee founder Subhash Chandra, has been appointed as the company's managing director and CEO. The Sony Group will nominate the majority of the combined company's
board of directors, which will include NP Singh, the current SPNI Managing Director and CEO. After the transaction closes, Singh will become chairman of Sony Pictures India (an SPE division), reporting to Ravi Ahuja, SPE's
chairman of Global Television Studios and SPE Corporate Development.
The transaction will help Sony expand its media business in the world's second-most populous country, where Zee controls 17% of the media and entertainment market.
The agreement comes
three months after a non-binding agreement between Zee and Sony was made public on Sept. 22, escalating a takeover battle between Chandra's family and Atlanta-based Invesco Developing Markets Fund, which owns 18 percent
of the company and controls the majority of the shares.
Given their relative strengths in scripted, factual and sports programming, as well as their respective distribution footprints across India and iconic entertainment brands, the combined
company should be well-positioned to meet the growing consumer demand for premium content across all entertainment touchpoints and platforms.
The latest report indicates that Sony and Chandra are redoubling their efforts to close the deal. While Chandra wants to keep his family's influence on the indebted media company he
founded in 1992, Sony will gain access to Zee's 1.3 billion global viewers and a massive archive of local Indian language content dating back to the 1990s.
With over 73 million monthly active users as of end-March, Zee's
own streaming platform is also a leader among local players.