The Zee Entertainment Enterprises Limited (ZEEL) board on Wednesday approved the merger with Sony Pictures Networks India (SPNI) after a 90-day period to conduct due diligence for the process.
Earlier in November, Zee MD and CEO Punit Goenka had said that the proposed merger "is in the final stages."
According to the deal, Sony, which will invest $1.5 billion, will hold 50.86 per cent stake in the merged entity and Zee the remaining 45.15 per cent.
The majority of the board of directors of the combined company will be nominated by the Sony Group and will include NP Singh, the current Managing Director and CEO of Sony Pictures Networks India Private Limited. Goenka will lead the combined company as its Managing Director & CEO.
The combined entity will own over 70 TV channels, 2 video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India) making it the largest entertainment network in India. Its nearest rival would be now Star and Disney in the Indian market.
Shares of Zee Entertainment Enterprises ended 5.26 per cent to Rs 349 apiece on BSE on Tuesday.
Meanwhile, Zee is at loggerheads with its largest shareholder Invesco, which in an open letter, had raised issues against the stake enhancement of the promoter family. Invesco in the letter dated October 11 had asked “why the founding family, which holds under 4% of the company’s shares, should benefit at the expense of the investors who hold the remaining 96%”.
In addition, Invesco had demanded an extraordinary general meeting (EGM) to rejig the board and for Goenka’s ouster and took the matter to court when Zee did not call the meeting.
The Zee-Invesco matter is currently being dealt by the National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and Bombay High Court. The HC had granted an interim injunction against Invesco in its October hearing.
Invesco Developing Markets Fund and OFI Global China Fund LLC together hold about 17.9 per cent stake in Zee.