The proposed merger between Zee Entertainment Enterprises Limited and Sony‘s TV operations in India has finally been given a green light – nearly two years after the deal was first announced. The merged entity’s estimated value is some $10 billion.
The regulatory green light came in the form of an oral order made Thursday by the Mumbai Bench of the National Company Law Tribunal (NCLT)
The deal is intended to combine the two companies’ linear TV networks, digital assets, production operations and program libraries.
According to the plans announced in September 2021 and finalized in December 2021, the merged company would retain Zee’s stock market listing in India. But Sony would provide a large cash injection and control a majority share stake of close to 51%.
The deal went through several hiccups from the Zee side before it came to fruition. There were objections from the Atlanta-based Invesco fund, one of Zee’s largest shareholders, which were later resolved. Earlier this year Zee survived insolvency proceedings. In June, India’s Securities and Exchange Board barred MD-CEO Punit Goenka and chair emeritus Subhash Chandra from holding any managerial or directorial positions in listed companies for a year while it carried out investigations into allegations of insider trading.
In July, the NCLT reserved the merger order after objections from creditors who are owed some $152 million, including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp and IDBI Trusteeship. On Thursday, the NCLT dismissed all objections.
One of the key points of the merger as initially proposed was that Goenka would serve as managing director of the merged entity. Given that the SEBI ban means he cannot hold a directorial positions, it is not immediately clear who is going to be the managing director of Sony-Zee.
PvNew has reached out to Goenka and N.P. Singh, managing director and CEO at Sony Pictures Networks India, for comment.
Sony Group Corporation, Sony Pictures Networks’ ultimate parent company, made no reference to the much-delayed merger in its results presentation on Wednesday. But in May, Sony said that it perceived India as one of its biggest growth opportunities.
