Zee, Sony to mergeZee Entertainment board gave its in-principle approval for the merger with Sony Pictures Network India (SPNI) after a meeting on Tuesday. Upon the announcement on Wednesday, Zee Entertainment’s share rose 25% in early trade. Not only market wise, the deal is a win-win deal for both channels in every sense. Zee Entertainment Enterprises Limited (ZEEL) has got a life saver and SPNI, after several attempts, finally has a chance at the very lucrative Indian regional market.
After Invesco, an investor in ZEEL with a 17 per cent holding, called for an extraordinary general meeting (EGM), it appeared as if the Indian company’s promoters had their backs to the wall. With a respectable shareholding in the merged entity, Subhash Chandra has managed to come out triumphant – of course, the deal has to get the green signal from the regulator.
Separately, Sony was in discussion to acquire MAA TV, a Telugu channel, almost a decade ago, till it was pipped to the post by Star. It was not till 2018 that it launched a Marathi entertainment channel.
Compared to this, Zee has an impressive presence in Hindi, and has wings spread across the South, along with Bangla and Marathi channels to name a few. In most of these markets, it is a solid No 1 or a feisty No 2. In all, ZEEL has 49 channels and Sony has 26. But most importantly, Zee has a wider geographical presence and a history of being tightly run. Sony, with a minimal regional presence was in a challenging situation and this will give them a huge leg-up.
Zee said in an early morning filing that the company will hold 47.07 per cent of the merged entity and SPNI would hold 52.93 per cent. Punit Goenka will be the Managing Director and CEO of the merged entity. The Zee board has authorised the management of ZEEL to initiate the required due diligence process.
Also read: Zee board gives in-principle approval for merger with Sony Pictures Networks India
Also read: Why Zee Entertainment share rose 25% in early trade today
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