The deal is done, Punit Goenka will lead the merged entity


The board of directors of entertainment company Zee Entertainment Enterprises (ZEE) approved the binding agreement with Sony Pictures Networks India (SPN), a subsidiary of Sony Pictures Entertainment, a day after the exclusivity period ended on Tuesday 90 day non-binding offer. .

Punit Goenka will lead the merged entity as the managing director and CEO of the company. The majority of the board of directors of the combined company will be appointed by the Sony Group and will include the current Managing Director and CEO of SPN, NP Singh. Singh will also assume a broader leadership role at SPE as Chairman of Sony Pictures India (a division of SPE). Singh will report to Ravi Ahuja, President of Global Television Studios and SPE Corporate.

The two had announced a merger on September 22 and as part of the deal. Sony will own 50.86% of the merged entity, while promoter group Essel will hold a 3.99% stake. Public participation will amount to 45.15%.

Zee currently holds 96.05 crore of shares, after the merger their holding will increase to 173.63 crore. The promoters are expected to get over Rs 1,000 crore from the non-competition. The promoters will buy more than 3.67 shares of the merged entity at Rs 300 per share to maintain the 3.99% stake.

In accordance with the Company’s Terms and Conditions, SPE Mauritius Investments Limited will pay Essel a total USD equivalent amount of over Rs 1,000 crore for the non-compete obligations.

In addition, the promoters of Zee have agreed not to own more than 20% of its outstanding shares. The promoters or founders of Zee have no right to acquire shares of the combined company from the Sony group.

SPE was advised on this transaction by Morgan Stanley, KPMG, Shardul Amarchand Managaldas. Zee has been advised by KPMG, JP Morgan, Trilegal and Boston.

(Edited by : Yashi Gupta)

First publication: STI


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