Zee Entertainment to merge with Sony Pictures

India’s largest television network Zee Entertainment Enterprises will merge with Sony Pictures Network India (SPNI), capping days of high drama during which firm’s shareholders sought removal of key officials.

Sony, which will invest US$1.575 billion, will hold 52.93 per cent stake in the merged entity and Zee the remaining 47.07, Zee Entertainment Enterprises (ZEEL) said in a statement.

In recent days, Zee has seen its top investor seek a management reshuffle, including the exit of chief executive Punit Goenka.

A majority of the merged company’s board would be nominated by Sony, while Goenka would lead it, according to the terms of the deal. Invesco Developing Markets Fund and OFI Global China Fund LLC, which together hold about 17.9 per cent stake in Zee, had sought an extraordinary general meeting of shareholders last week to oust Goenka along with two board members. The move was seen as an attempt to end the sway of founder Subhash Chandra’s family over the company founded in 1992. While the deal may take some pressure off Zee, it will help expand Sony’s media business in India.

In an exchange filing, Zee said it has entered into a non-binding term sheet with SPNI to bring together their linear networks, digital assets, production operations and programme libraries. The combined entity will own over 70 TV channels, 2 video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India) making it largest network in India. Its nearest rival would be now Star and Disney in the Indian market.

While the deal may take some pressure off Zee, it will help expand Sony’s media business in India