Zee Entertainment will merge with Sony Pictures- will invest Rs 11 thousand crore- The news of a big merger deal has come to the fore in the entertainment sector. Zee Entertainment has signed a merger deal with Sony Pictures India. That is, Zee Entertainment will now merge with Sony Pixars. The company has given this information in an exchange filing.
According to the deal, Sony Pictures will invest about $ 1.575 billion (about Rs 11,500 crore) in the merged company. The board of directors of ZEEL in its meeting held on September 22, 2021, has approved this merger deal.
Sony Pictures’ stake will be 52.93 percent
The promoters of Sony India will infuse growth capital into the company under the merger agreement. Zee Entertainment’s shareholders will hold a 47.07 percent stake in the merged company. Whereas Sony Pictures Networks will hold a 52.93 percent stake in the merged company.
The company has also told that Puneet Goenka will be the MD and CEO of the company after the merger for the next five years. Sony Group will have the right to nominate a Majority Director in the merged company.
Under this merger agreement, both Zee Entertainment and Sony Pictures will merge their respective liner networks, digital assets, production businesses, and program libraries. There is also a provision in this agreement for the merger that the promoter’s family will have complete freedom to increase their stake in the company from the current 4 percent to 20 percent.
R Gopalan of Zee Entertainment has said that Zee’s business has seen steady growth. The company’s board is confident that Zee will benefit more from this merger. The coming together of both the companies will give new energy to the company. Due to this, the shareholders of the company will also get a big benefit going forward.
Sony Group will have the right to nominate most of the directors.
An exclusive non-binding term sheet has been signed between ZEEL and SPNI. The due diligence of the deal will be completed in the next 90 days. The existing promoter family Zee will have the option to increase its shareholding from 4 percent to 20 percent. Sony Group will have the right to nominate most of the directors on the board.
Shares jump 15%
After the news of this merger deal surfaced, Zee Entertainment Enterprises Ltd. (ZEE) shares saw a tremendous rise on Wednesday. The company’s shares have jumped 15 percent or 38.35 points to reach 294.05 today. The upper circuit has hit the stock.