Zee Entertainment’s board gives nod to merger with Sony Pictures
In a boardroom coup, the directors of ZEE Entertainment Enterprises have given an in-principle approval for the company’s merger with Sony Pictures Networks India.
As part of the non-binding agreement, Sony Group also proposed to invest $1.58 billion in the merged company to create content, build digital platforms and bid for sports broadcasting rights.
The merged entity will be a publicly listed company with ZEE founder Subhash Chandra’s son, Punit Goenka, continuing as managing director and chief executive officer.
Shares of Zee surged 32% to ₹337.10 on Wednesday following the announcement.
This move is probably the beginning of more commotion—ZEE’s largest shareholders wanted Goenka and two other directors removed from the board.
Abneesh Roy, executive vice-president at Edelweiss Financial Services, said the merged network would have a 27-28% market share versus Star’s 24%.
The proposed deal is expected to provide some relief to Zee’s controlling shareholders and Goenka.
Last week, Zee’s top shareholders—Invesco Developing Markets Fund and OFI Global China Fund Llc—called a special shareholders’ meeting to seek a board recast, including the removal of Goenka as a director, citing corporate governance concerns.