Zee-Sony deal: Essel Group will get 2% stake from Sony in the new company

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Zee-Sony deal: Essel Group will get 2% stake from Sony in the new company

Zee-Sony deal: Essel Group will get 2% stake from Sony in the new company- Zee Entertainment is going to merge with Sony Pictures. Zee Entertainment’s promoter Essel Group will also get a 2% stake in the new entity formed after the merger. Puneet Goenka, MD, and CEO, Zee Entertainment said this in a statement. The merger proposal is yet to be approved by the public shareholders of ZEE.

ZEE and Sony have entered into a non-compete agreement for the merger. At present, Essel Group holds a 3.44% stake in ZEE Entertainment. However, this ratio will come down after the proposed merger. Under the merger agreement, Sony Pictures will hold a 52.93 percent stake in the new company and will later transfer the 2% stake to Essel Group.

In this way, Sony will have a 51% stake in the new company, which is the controlling majority. The shareholders of Zee Entertainment will hold a 47.07% stake in the new company.

Punin Goenka will be the MD and CEO of the company post-merger for the next five years. After the merger, Sony Group will have the right to nominate a majority director in the new company. After signing the term sheet, 90 days have been given to complete the deal.

Zee Entertainment shares rose 39% today, the impact of the merger with Sony Pictures India

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.