On the 22nd of September, Zee Entertainment Enterprises Limited (ZEEL) announced a merger with Sony Pictures Networks India (SPNI.)
With this merger, SPNI would invest an amount of $1.57 billions, owning the majority of shares. According to the merger agreement, Sony Pictures Network India would have 52.93 % and Zee Entertainment would have the remaining 47.07 % shares.
The decision of the merger of two the entertainment channels was taken by the ZEEL Board. It is to be noted Mr. Puneet Goenka, the Managing Director and Chief Executive Officer (CEO) of ZEEL would also be the MD and CEO of the merged companies. The term of Mr. Puneet Goenka as the MD and the CEO is said to be for the next five years. However, the SPNI would have authority to nominate more directors on the board if needed for the merged entity.
In an official statement, regarding the same, ZEEL said, “The Board of Directors of ZEEL at its meeting held on September 22, 2021, has approved the execution of a non-binding term sheet (“Termsheet”) with Sony Pictures Networks India Private Limited (“Sony India”), in relation to a potential transaction involving a composite scheme of arrangement for the merger of the Company and Sony India and infusion of growth capital by the promoters of Sony India into Sony India as part of the merger.”
The big merger announcement came a week after ZEEL witnessed shareholder activism and called for ouster of promoters. The big investors of ZEEL even called for the removal of directors including Puneet Goenka.
It is to be noted, Zee and Sony entered into a non binding term sheet to combine both companies’ linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which the two parties will conduct mutual diligence and finalize definitive agreements.
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