Sony Pictures Networks India (SPN) is set to acquire a majority share in Zee Entertainment, India’s giant – but financially strapped – broadcasting business.
According to India’s Economic Times, the combined entity will own 75 TV channels, two video streaming operations (ZEE5 with a global audience and Sony’s LIV), a pair of film studios (Zee Studio and Sony Pictures India) and making it the largest entertainment business in India, and bigger than rivals Star and Disney India.
The merger, approved by Zee’s board on September 21st will likely see SPN controlling 52.93 per cent of the company (and Zee shareholders holding the remaining 40.07 per cent).
As far as the Zee shareholding is concerned (and with the Chandra/Goenka family holdings in particular) they can, if they wish, increase their holdings from the current 3.99 per cent to 20 per cent.
“The board of directors at ZEE have conducted a strategic review of the merger proposal between SPN and ZEE,” said R Gopalan, chairman, ZEE. “As a board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and ZEE. We have unanimously provided in-principle approval to the proposal and have advised the management to initiate the due diligence process.”
“The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of ZEE for their approval,” Gopalan added.
The merger brings to an end a period of financial stress for Zee. The company’s founder Subhash Chandra has been trying to organise a rescue for ZEE for some years and in 2019 sold an 11 per cent stake of Zee to Invesco (and which took its overall holdings to 17.88 per cent).
Currently, Punit Goenka will remain as MD and CEO.