Zee-Sony Merger: ZEEL Share Price Jumps 20%, Know Key Highlights Of The Deal

Zee Entertainment said that Punit Goenka will be MD & CEO of the merged company for five years.

Zee Entertainment will merge with Sony Pictures

New Delhi: After Zee Entertainment Ltd witnessed shareholder activism, the company has signed a merger deal with Sony Pictures Networks India Private Limited, according to the exchange filing. Under the deal, Sony Pictures Entertainment will infuse $1.575 billion in the merged entity, according to the Moneycontrol report.

Media and entertainment giant Zee Entertainment shares were locked at 20 percent upper circuit in early trade on Wednesday after the company's board approved the merger deal. 

Here are 10 highlights of the deal

• Shareholders of Zee Entertainment will hold 47.07 percent stake after the merger while Sony Pictures Networks will have a 52.93 percent stake in the merged entity. Punit Goenka will continue to remain MD & CEO of the merged company for five years.
• Sony Group will have the right to nominate majority directors on the board of the merged entity. Going by the term sheet, the promoter family is free to increase its shareholding from the current 4 per cent to up to 20 per cent, the firm said.
• Majority of the board of directors of the merged entity will be nominated by Sony Group.
• Punit Goenka will continue to be the Managing Director and CEO of the merged firm as per the deal. If the deal goes through, it will fend off the largest investor Invesco, which sought his removal from ZEE's board.
• The shareholders of Sony 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.
• Zee Ent, Sony India have entered into a non-binding term sheet.
• The term sheet provides exclusivity for 90 days during which the two parties will conduct mutual diligence and finalize definitive agreement(s)
• The merged entity will be a publicly listed company in India
• Going by the term sheet, the promoter family is free to increase its shareholding from the current - 4 per cent to up to 20 per cent, in a manner that is in accordance with applicable law
• The final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third party approvals, including the votes of Zee's shareholders.