Key Highlights:
Sony Pictures Networks India announced on September 22nd that it has agreed to acquire Zee Entertainment.
The two companies stated that they will perform due diligence and complete a definitive agreement within the following 90 days.
Sony-Zee Merger
Sony Pictures Networks India announced on September 22nd that it has agreed to acquire Zee Entertainment, which, if completed, will merge two of India’s largest broadcasting conglomerates that operate large cable television networks, streaming services, music labels, and a slew of other digital assets.
The Japanese conglomerate’s subsidiary announced a $1.575 billion investment in Zee Entertainment, a 30-year-old company dealing with internal governance issues.
Sony said it plans to buy a controlling 53 percent stake in Zee Entertainment, which operates over a dozen TV channels in English, Hindi, and many regional languages and has tie-ups with several global studios for broadcasting and streaming their library in India. Likewise, Sony Pictures Networks India operates over a dozen TV channels in the South Asian market.
A merger would help the two companies reclaim market share in the country, where the television landscape has changed dramatically in the last two decades due to the arrival of new players and the rapid adoption of the internet.
Merger to be completed soon
For the past 25 years, Zee and Sony have been important fixtures in the Indian television industry. Sony Entertainment Television started in India in 1995 and has broadcast some of the most famous series such as “Indian Idol” and “Kaun Banega Crorepati,” an official Hindi adaptation of “Who Wants to Be a Millionaire?”
The companies also run on-demand streaming services like Zee5 and SonyLiv, which compete with dozens of other competitors like Netflix, Amazon Prime Video, and Disney’s Hotstar. Both Zee5 and SonyLiv have around 150 million monthly active users, however, there is likely some overlap between their user bases.
The two companies stated that they will perform due diligence and complete a definitive agreement within the following 90 days. According to analysts, the transaction will require the agreement of a majority of Zee’s shareholders.
Zee’s shares surged by 35%
The publicly traded Zee Entertainment stated in a BSE filing that the proposed merged entity will be managed by existing Zee CEO Punit Goenka. Several Zee shareholders have recently requested that Goenka and other key executives be fired.
Zee’s stock jumped 35% on the news on 22nd September, valuing the company at $4.5 billion.
“The merged business will be a publicly-traded company in India and will be better positioned to drive the consumer shift from traditional pay-TV to the digital future,” Sony Pictures Networks India said in a statement. “The merger of ZEEL and SPNI will bring together two premier Indian media network firms, benefiting consumers across India across content categories ranging from cinema to sports.”
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