Zee Entertainment to merge with Sony Pictures Networks India, board approves decision, stock jumps

The merger between leading media firm Zee Entertainment and Sony Pictures Networks India has been approved. Zee Entertainment and Sony Pictures on Wednesday (September 22) said they have received in-principle approval for the merger, which will bring together the liner networks, digital assets, production operations and program libraries of the two companies.

Sony Pictures Networks India (SPNI) said in a statement that its parent company Sony Pictures Entertainment will make further investments so that SPNI has a cash surplus of approximately US$1.575 billion. The effect of this deal is also visible on the stock of Zee Entertainment. Zee’s shares also jumped after this news.

According to Zee Entertainment Enterprises Limited (ZEEL) based on the current estimated equity values ​​of ZEEL and SPNI, the indicative merger ratio in favor of ZEEL is 61.25 per cent. “However, after the proposed investment of growth capital in SPNI, ZEEL is expected to hold 47.07 per cent stake in the new entity and remaining 52.93 per cent with SPNI,” Zeel added.

The statement also said that Zee Entertainment Managing Director and CEO Punit Goenka will continue to lead the merged entity. However, Goenka is facing pressure to step down from the company’s two biggest shareholders – Invesco and OFI Global China Fund LLC.

According to Zee Business, ZEEL has merged a leading media and entertainment company in South Asia with a strategy to focus on profitability. Puneet Goenka will continue to be the Managing Director (MD) and Chief Executive Officer (CEO) of the merged company. The due diligence of the deal will be completed in the next 90 days.

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