The merger of the two companies was initially announced in September when both of them signed a non-binding sheet has finally been approved on December 22. This merger will make it India’s second-largest entertainment network.
After three months of the announcement of the merger, Sony Pictures Networks India ( SPN ), a subsidiary of Sony Corp’s Sony Pictures Entertainment ( SPE ) Has agreed to merge with Zee Entertainment Enterprise ( ZEE ). Sony will be a major stakeholder of the merged entity with a 50.86 percent stake. ZEE will own 3.99 percent of the stake with the option to increase it by 20 percent from the market. The other Zee Entertainment Enterprises Ltd. ( ZEEL ) will own 45.15 percent of the total stake.
This merger entity will have 75 TV Channels, two video streaming services namely ZEE5 and SONYLIV, two film studios named Zee Studios and Sony Pictures Films India, a digital content studio called Studio NXT, and programming libraries.
Sony has also agreed to appoint Punit Goenka as MD and CEO of the final merged entity which was an important part of the deal. Under the terms of the definitive agreement which were signed, Sony will have a cash balance of $1.5 billion to enable the merged entity to “drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities. While Goenka was decided as the head of the entity, the majority of the Board of Directors including the current Sony Pictures Network India (SPNI ) Managing Director and CEO N.P. Singh was to be nominated by the Sony Group which has been agreed upon. Singh will now be in a broader executive position at Sony Pictures Entertainment ( SPE ) as Chairman and will be reporting to Ravi Ahuja ( Sony Pictures Entertainment’s Chairman of Global Television Studios and SPE Corporate Development ).
Zee-Sony combined will command a viewership of 63 percent in the Hindi movies, with a 26 percent viewership share overall in India. While the definitive terms of the agreement have been signed by the two companies, Invesco ( ZEE’s largest shareholder ) along with OFI Global which holds an 18 percent stake in the media company were concerned about the promoter group’s stakes increasing up to 20 percent. The agreement of December 22 has limited the equity of the ZEEL promoters to 20 percent of its outstanding shares.
Analysts have said that the merger will play an important role in upcoming times and will contend seriously to overtake Star and Disney in the times to come. Experts have also pointed out that, it will bring the best vision of the two companies combined together and will be heavily beneficial to the entertainment industry.