Sony-Zee merger: Punit Goenka to lead merged entity; all details here

Sony Pictures Networks India Ltd (SPNI) and Zee Entertainment Ltd (ZEEL) on Wednesday announced that they have signed definitive agreements to merge both the companies to form a new entity. This announcement comes after the Zee board meeting on Tuesday. Punit Goenka will lead the merged entity.

As per the deal, Sony Pictures Entertainment (SPE) will indirectly hold a majority of 50.86 per cent of the combined company, while ZEEL will hold a 45.15 per cent. ZEEL promoters (founders) will hold 3.99 per cent. SPE will pay a non-compete fee to certain promoters (founders) of ZEEL, which will be used by them to infuse primary capital into SPNI, allowing them to eventually acquire 2.11 per cent SPNI shares in the combined company.

“Under the terms of the definitive agreements, SPNI will have cash balance of USD $1.5 bn (assuming an INR:USD exchange rate of 75:1) at closing, including through infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL, to enable the combined company 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,” the companies said in a statement.

As part of the agreement, the promoters (founders) of ZEEL have agreed to limit the equity they might own in the combined company to 20 per cent of its outstanding shares.

The companies further added that Goenka will act as the Managing Director & CEO of the company.  The majority of the board of directors will be nominated by Sony Group, and will include current SPNI Managing Director and CEO NP Singh. Singh will act as the Chairman of Sony Pictures India, and will report to Ravi Ahuja, SPE’s Chairman of Global Television Studios and SPE Corporate Development.

Commenting on the merger Goenka said, “It is a significant milestone for all of us, as two leading media & entertainment companies join hands to drive the next era of entertainment filled with immense opportunities. The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms. I am immensely grateful to the teams at ZEEL, SPE and SPNI for their efforts, that swiftly led us to this point within the stipulated timelines.”

Singh said that the merger will create a company that’s best in class and will redefine the contours of the media and entertainment industry. “As a representative of SPE on the Board of the new merged company, it will be my endeavour to provide strategic guidance and support to the company’s operating team in achieving our vision,” he added.

The companies expect the new entity to achieve business synergies and with their programming and distribution, reach a position to meet the growing consumer demand for premium content across platforms. They also said that the merged entity will be better equipped to compete with the world’s largest streaming players.

Also read: Zee-Sony merger approved by Zee Entertainment board