MUMBAI: Eight to 12 months. That is the expected time frame for the proposed merger between Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd. (Zee) to be completed, assuming that all regulatory clearances go through.
It was announced Wednesday that definitive agreements have been signed to merge Zee with and into SPNI and combine their linear networks, digital assets, production operations and program libraries.
The completion of the deal will require clearances from the Competition Commission of India (CCI), National Company Law Tribunal (NCLT) AND approval from 75% of Zee’s shareholders.
Soon after Wednesday’s announcement, Zee managing director & CEO Punit Goenka, who will lead the merged company as its MD & CEO, offered his views on the merger agreement. For the record, SPNI will own a 50.86% stake in the merged entity while Zee’s founders will own 3.99%. Goenka, while the other Zee shareholders will hold the remaining 45.15% stake.
Speaking to to CNBC, Goenka opined: “The combined entity will be close to a $2 billion in revenues enterprise. In terms of profitabilty, it will be the most profitable media business in terms of EBITDA across the world and therefore it is going to be well poised to really bring value in the long term. It will be the largest in terms of revenue in this country.”
In an interview with Bloomberg Markets and Finance, Goenka further said: “Sports definitely will be one of the key drivers going forward. But apart from that, the digital platform the OTT platform is going to be the other key driver. And combining both Zee and Sony’s content library is going to give us the edge to compete with the global platforms and the domestic platforms going forward. So these are two key but distinct strategies that we are going to follow.
“It’s going to really give us the advantage as far as investing on the digital platform as well as going after really key marquee properties in the sports genre for growth as well as for gaining market share.”
Questioned as to whether a bid for the media rights to the Indian Premier League would be on top of the agenda, Goenka was circumspect while stating: “There is no reason for us not to look at every premium property that is available out there. And IPL is certainly one of the key properties that is out there.”
Asked what was really exciting him about this new entity and what he saw Zee bringing to the table, Goenka offered: “I think what is most exciting for me is that the entire (South Asian) diaspora that we are addressing today through the genres and the expanse of the content offering that we’ are going to be presenting, just opens up a huge landscape of the addressable market, which as Zee alone we were not doing.
“That’s really exciting for me because that’s something new for me. And as you know, we sold the sports business to Sony about five years back and it comes into the fold again. And it’s going to be really exciting in the digital era how to monetise and expand the business further.”
POINTS OF NOTE
Combined entity will have
75 TV channels
2 Video streaming services (Zee5 and Sony LIV)
2 film studios
A digital content studio
Content library
Promoter family stake
In the merged entity, 3.99% stake will be with the promoter family (Zee founder promoter Subhash Chandra and his sons Punit and Amit Goenka). Currently the promoter family owns just 1.88% stake. Sony is paying a “non compete fee” to the promoters for the acquisition of an additional 2.11% stake, which will bring their stake up to 3.99%.
Related report
SPN, Zee ink definitive merger agreement; next step public listing
