Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) announced today that they have agreed to merge their linear networks, digital assets, production operations, and programme libraries in an exclusive, non-binding Term Sheet. The non-binding Term Sheet grants ZEEL and SPNI an exclusive 90-day negotiating period during which they will perform mutual due diligence and conclude definitive, binding agreements. The merged firm would be listed on the Indian stock exchange and would be in a better position to drive the consumer shift from traditional pay television to the digital future.
The merging of ZEEL and SPNI will bring together two of India’s most powerful media networks.
The non-binding Term Sheet stipulates that Sony Pictures Entertainment, SPNI’s parent company, will invest growth capital so that the combined company has a cash balance of approximately USD $1.575 billion at closing, which will be used to improve the combined company’s digital platforms across technology and content, ability to bid for broadcasting rights in the fast-growing sports landscape, and pursue other growth opportunities. The merged business would be majority-owned by Sony Pictures Entertainment. Punit Goenka, the current Managing Director and CEO of ZEEL, will manage the merged firm.
Sony Group would have the power to nominate the majority of the board members on the merged company’s board of directors, which would result in Sony Group holding the majority of the board members.
A final deal is expected to be subject to normal due diligence, negotiation and execution of definitive binding agreements, and applicable corporate, regulatory, and third-party approvals, including a vote by ZEEL shareholders.