ZEEL, Sony Merger Recieves Stock Exchanges Nod

ZEE Entertainment Enterprises Limited (ZEEL), today received approval from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for its proposed merger with Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India Private Limited (SPNI)).

The approval from the stock exchanges marks a firm and positive step in the overall merger approval process. The approvals permit the Company to proceed with the next steps in the overall merger process. The Composite Scheme of Arrangement remains subject to applicable regulatory and other approvals.

In December 2021, ZEEL and Culver Max Entertainment signed definitive agreements to merge ZEEL with and into SPNI and combine their linear networks, digital assets, production operations, and program libraries.

Under the terms of the definitive agreements, SPNI, which is an indirect subsidiary of Sony Pictures Entertainment (SPE), will have a cash balance of USD 1.5 billion (assuming an INR: USD exchange rate of 75:1) at closing, including through infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL, to enable the combined company to drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities.

Under the transactions contemplated by a non-compete agreement, SPE, through a subsidiary, will pay a non-compete fee to certain promoters (founders) of ZEEL, which will be used by such promoters (founders) to infuse primary equity capital into SPNI, entitling the promoters (founders) of ZEEL to acquire shares of SPNI, which would eventually equal approximately 2.11 percent of the shares of the combined company on a post-closing basis.

After the closing, SPE will indirectly hold 50.86 percent of the combined company, the promoters (founders) of ZEEL will hold 3.99 percent, and the other ZEEL shareholders will hold a 45.15 percent stake.

The merger deal is also awaiting approval from the Competition Commission of India (CCI). Culver Max Entertainment, Bangla Entertainment Private Limited (BEPL), ZEEL, and Essel Group Participants filed an application before the CCI about the merger on 29th April 2022.