Pair to form new combined company in the Indian broadcasting
Sony to invest US$1.58bn and take majority stake in new entity
Zee MD and CEO Punit Goenka set to lead organisation
Company to bid for sports broadcast rights and pursue other growth opportunities
Pay-TV broadcaster Sony Pictures Networks India (SPN) has reached an agreement to take control of Zee Entertainment, India’s largest listed media company.
The pair have entered into an exclusive, non-binding term sheet to merge both companies’ linear networks, digital assets, production operations and programme libraries, which would create a giant entity in the Indian broadcasting market.
The term sheet provides an exclusive negotiation period of 90 days during which SPN and Zee will conduct mutual diligence and negotiate definitive, binding agreements.
Under the terms of the deal, Sony will invest US$1.58 billion and take a reported 53 per cent majority stake in the new company, which will be led by current Zee managing director and chief executive Punit Goenka. The combined company’s board of directors would include directors nominated by Sony Group and result in the media giant having the right to nominate the majority of the board members.
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The final transaction is subject to completion of customary due diligence, negotiation and execution of definitive binding agreements, as well as required corporate, regulatory and third party approvals, including a Zee shareholder vote.
Should the deal go through, the combined entity would be a publicly listed company in India. SPN said the new business would ‘be better positioned to lead the consumer transition from traditional pay-TV into the digital future’.
SPN added that the new company will bid for sports broadcasting rights and pursue other growth opportunities.
SPN’s current rights portfolio includes an extensive soccer offering, such as the Uefa Champions League, Uefa Europa League, Uefa Nations League, Fifa World Cup European qualifiers, Serie A, and the FA Cup. The broadcaster also showed this summer’s Copa America and Uefa 2020 European Championship.
News of the deal comes days after Zee’s largest shareholder, US investment management firm Invesco, attempted to overhaul the board and oust Goenka due to concerns over the company’s performance and corporate governance.
Zee currently has a presence in over 173 countries and claims to have a reach of more than 1.3 billion people around the world.