Zee Sony merger approved the decision of making entertainment content will be now under the one roof

Country's first domestic satellite channel network Zee Entertainment and Sony Pictures Networks India on Wednesday signed the final agreement of mutual merger.

Zee Sony merger approved the decision of making entertainment content will be now under the one roof

Zee Sony merger approved the decision of making entertainment content will be now under the one roof

Zee and Sony have got the approval of the merger from the board. The board said that Sony will have 50.86 percent stake in the merged entity. Country's first domestic satellite channel network Zee Entertainment and Sony Pictures Networks India on Wednesday signed the final agreement of mutual merger. All the channels and digital networks of both the companies will now work together as the merger is implemented. During this time, all the decisions of making entertainment content for these companies will now be under one roof. After this historic merger of the Indian entertainment industry, the two companies will also merge their existing digital reach platforms Sony Liv and G5 and the main focus of the merger will be on increasing the digital reach of entertainment content in the country. Zee CEO Puneet Goenka recently visited the US and met top Sony officials in this regard. Work has also started on listing the combined company formed after the completion of this merger as a public company on the Indian stock exchange. However, before its completion, both these companies will have to comply with all the conditions, permission of the shareholders, approval of third parties and decisions of regulatory bodies.

According to the final agreement, Sony Pictures will have $1.5 billion, or about Rs 112.50 billion, in cash at the time of the merger, which will be raised by Sony shareholders and the founding promoters of Zee Entertainment Enterprises Ltd, the two companies said on Wednesday. The proceeds will be used by the combined company to purchase media rights to fast-growing games, to build better and sharper entertainment content across platforms, to expand its reach in the digital environment and to explore other growth opportunities.

The terms of the merger also included that Sony Pictures Networks India would pay the promoters of Zee a non-rivalry fee, which Zee Company would use to purchase Sony shares. These shares would constitute about 2.11 per cent of the combined company and after completion of all merger formalities, Sony Pictures Entertainment would have a decisive stake of 50.86 per cent in the new company. Zee's founding promoters will hold 3.99 per cent and Zee's other shareholders will hold 45.15 per cent in the new company. The founding promoters of Zee will be free to increase their stake in the new company. However, this stake cannot exceed 20 per cent in any case and for this they will have to buy shares from other shareholders according to the rules of the market and with complete transparency.

Puneet Goenka has been made the Managing Director and CEO of this joint company formed after the merger of Sony and Zee. Most of the directors on the board of directors running the new company will be nominated by the Sony Group. NP Singh, the current Managing Director and CEO of Sony Pictures Networks India, will also attend. Post the merger of the two companies, NP Singh will serve as Sony Pictures Entertainment's Chairman, Sony Pictures India, reporting directly to Sony Pictures Entertainment's Global Television Studios and Ravi Ahuja, Chairman, Sony Pictures Entertainment Corporate Development.

Commenting on this significant development, Puneet Goenka, Managing Director and CEO, Zee Entertainment Enterprises Ltd. said, “The combined company will create a comprehensive entertainment business that will help us choose the best entertainment content for our customers across platforms. According to Puneet, this merger will bring progress in the business of the combined company and will take it towards a good growth on the global stage. On the other hand, Ravi Ahuja, President, Global Television Studios, Sony Pictures Entertainment, described the merger as a creation of unmatched entertainment for Indian customers. He said that this is an important step towards bringing together the strongest heroes of the business, creators of entertainment content and the film library.