New Delhi: Zee Entertainment Enterprises and Sony Pictures Networks India on Wednesday announced that they have signed definitive agreements for their merger after the conclusion of a special negotiation period during which both sides exercised due diligence.
In a joint statement, the two companies said they have “signed definitive agreements to merge Zee with Sony Pictures and into Sony Pictures and add to their linear network, digital assets, production operations and program libraries”.
The agreements follow the conclusion of a special negotiating period during which Zee and Sony Pictures have mutually exercised due diligence, it added. When the merger deal was announced in September, the two networks had said Sony would invest $1.575 billion and hold a 52.93 per cent stake in the merged entity, while Zee would hold the remaining 47.07 per cent.
Under the terms of the definitive agreements, the statement said that SPNI will have a cash balance of $1.5 billion upon winding up, which includes infusions by existing shareholders of Sony Pictures and promoter founders of Zee.
It aims to enable the combined company to “promote faster content creation on the platform, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the rapidly growing sports landscape, and pursue other growth opportunities.” ” has to be enabled.
According to the joint statement, Punit Goenka will continue to be the managing director (MD) and chief executive officer (CEO) of the merged entity. Most 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 India.
After the closure, the newly combined company will be publicly listed in India. The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder and third party approvals, the statement said.
As part of the deal, Sony Pictures Entertainment will pay a non-compete fee to certain promoter founders of Zee, which will be used by them to infuse primary equity capital in Sony Pictures India. This will give them the right to acquire shares of SPNI, which will be equivalent to approximately 2.11 per cent of the shares of the combined company on an eventual post-closure basis.
The non-compete fee will be paid by Sony Pictures Entertainment, of which Sony Pictures India is an indirect subsidiary, through a subsidiary, the statement said.
“After the closure, Sony Pictures Entertainment will indirectly hold 50.86 per cent of the combined company, 3.99 per cent with Zee’s promoters (founders) and 45.15 per cent with other Zee shareholders.”
Under the definitive agreement, the promoter founders of Zee have agreed to limit the equity they can hold in the combined company to 20 per cent of its outstanding shares. This creation does not confer on them any pre-emptive or other right to acquire equity of the combined company from Sony Group, the combined company or any other party, the statement said.
Ravi Ahuja, President of Global Television Studios and SPE Corporate Development, Sony Pictures Entertainment, said, “Today is a significant step in our efforts to bring together some of the strongest leadership teams, content creators and film libraries in the media business to create exceptional entertainment. is step. and value to Indian consumers.”
Sony Pictures India MD and CEO NP Singh said the merger will create a company that is “best-in-class and will redefine the contours of the media and entertainment industry”.
Goenka said, “The combined company will create a comprehensive entertainment business, allowing us to serve our consumers with a wide range of content options across the platform… This merger will jointly take the businesses to the next level and drive substantial growth.” presents a significant opportunity to deliver in the global arena.”
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