ZEEL-Sony mega-merger deal will create close to $2 billion in revenue: MD & CEO Punit Goenka

The Board of Directors of ZEE Entertainment Enterprises Limited (ZEEL) present and voting in its board meeting held on 21st September 2021, unanimously provided in-principle approval for the merger between Sony Pictures Networks India (SPNI) and ZEEL.  

The Board has evaluated not only on financial parameters, but also on the strategic value which the partner brings to the table. The Board concluded that the merger will be in the best interest of all the shareholders and stakeholders. 

Punit Goenka will continue as the Managing Director (MD) and Chief Executive Officer (CEO) after the merger of Zee Entertainment and Sony Pictures India.  

Talking about the mega-merger deal, Goenka said: “The mega-merger between ZEE Entertainment Enterprises Limited and Sony Pictures Networks India will create the largest media and entertainment company in India. The merger will create close to $2 billion in revenue.”  

He further added that the valuation of the merged entity will stand at $1.6 billion cash. Shareholding of ZEEL will be 47 per cent in the mega-merger. Similarly, there will be a non-binding term sheet with 90 days of mutual diligence.”  

Goenka also shared that Sony will have the right to appoint new people on the board as a promoter. The fund infusion avenues will be decided by the new board of the merged entity.”   

He also asserted that the overlaps are largely in the Hindi GEC space. However, the objective is to maximise viewership. The MD also mentioned that no open offer is required in a merger.  

Goenka further added that the channel rationalisation call will be taken by the board of the merged entity. Similarly, the capital allocation strategy will also be taken by the board.   

He mentioned that “We will first optimise revenue from the merged entity and then cost.”

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The Board has authorised the management of ZEEL to activate the required due diligence process. The shareholders of SPNI, will hold a majority stake in the merged entity.  

The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately $1.575 billion at closing, for use in pursuing other growth opportunities.

(Disclaimer: Zee Entertainment is not our sister concern/group company. Though our names sound similar but our company is owned by Zee Media Corporation, which is a different group.)