Sony Pictures Networks India has proposed a deal to take control of Zee Entertainment, India’s largest listed media company, whose founding family is resisting a rare revolt by foreign shareholders.
If the deal proceeds, it would create one of India’s biggest media conglomerates, with dozens of channels encompassing Sony’s popular sports networks and Zee’s popular Hindi language news and entertainment channels, in addition to streaming services and film studios.
The companies said they had agreed to a non-binding term sheet for a merger that would involve Sony investing almost US$1.6 billion and taking a 53% stake in the combined entity. The companies have 90 days to conduct due diligence and finalize the deal. Zee’s Mumbai-listed shares surged 24% on Wednesday, September 22, after the deal was announced.
News of the merger came days after Zee’s biggest shareholder, US investment group Invesco, launched an effort to overhaul the board and oust chief executive Punit Goenka, the son of founder Subhash Chandra, amid dissatisfaction with the media group’s performance and corporate governance.
The Sony deal would allow Goenka to retain his role at the new entity, though Sony would nominate the majority of board directors.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
