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- SPNI, Zee Entertainment Enterprises Ltd sign definitive agreements for their merger
- The merger between the two networks was announced in September.
- The agreements follow the conclusion of a special negotiation period during which ZEEL and SPNI
Sony Pictures Networks India Pvt Ltd (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday said 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 integrate ZEEL with SPNI and their linear network, digital assets, production operations and program library”.
The agreements follow the conclusion of a special negotiation period during which ZEEL and SPNI 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 52.93 per cent in the merged entity and Zee the remaining 47.07 per cent.
Under the terms of the definitive agreements, SPNI will have a cash balance of USD 1.5 billion upon closure through infusion by existing shareholders of SPNI and promoter founders of Zeel, the statement said.
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.
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 agreement, Sony Pictures Entertainment Inc. (SPE) will pay a non-competitive fee to certain promoter founders of ZEEL, which will be used by them to infuse primary equity capital in SPNI. This would give them the right to acquire the shares of SPNI, which would eventually be worth around 2%.
11 per cent of the shares of the combined company on a post-closure basis.
The non-compete fee will be paid by Sony Pictures Entertainment Inc., of which SPNI is an indirect subsidiary, through a subsidiary, the statement said.
“After the closure, SPE will indirectly hold 50.86 per cent majority of the combined company, promoter (founders) of ZEEL will hold 3.99 per cent and other ZEEL shareholders will hold 45.15 per cent,” it added.
Under the definitive agreement, the promoter founders of ZEEL have agreed to limit the equity that 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.
ZEEL Chief Executive Puneet Goenka will lead the combined company as its Managing Director and CEO.
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Most of the board of directors of the combined entity will be nominated by the Sony Group and will comprise of SPNI’s current Managing Director and CEO, NP Singh, the joint statement said.
Ravi Ahuja, SPE President, Global Television Studios and SPE Corporate Development, 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 and value. It is for Indian consumers.”
SPNI 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… The merger will take the businesses jointly to the next level and drive substantial growth.” presents a significant opportunity for the global arena.”
Invesco Developing Markets Fund, which along with OFI Global China Fund LLC, holds about 17.9 per cent stake in ZEEL, had opposed the merger deal.
Both the entities have been pressing for the EGM of ZEEL to discuss various issues including the removal of Goenka and are currently locked in a legal battle.
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