Zee Entertainment Enterprises and Sony Pictures Networks India have received approval from the company law tribunal to merge, creating roughly $10 billion media and entertainment behemoth.
The Mumbai bench of the National Company Law Tribunal (NCLT) dismissed all objections to the merger. It had reserved the order a month ago. After the NCLT order, Zee shares ended 18% higher last week to close at Rs 286 on the BSE.
The merger, announced in September 2021, has been hobbled by legal fights. First by Zee’s largest shareholder, Invesco, and then by creditors like Indian Performing Right Society, IndusInd Bank, and Axis Finance, for defaulting on payments. Later, the Sebi order prohibiting MD Punit Goenka from holding important managerial positions in publicly traded companies was also a barrier. Sebi's decision had been contested by Goenka, but the Securities and Appellate Tribunal declined to postpone the verdict.
In terms of income, channel count, and audience size, the combined company will emerge as the nation's dominant media and entertainment force. The new company will go up against Walt Disney India and Viacom, which is owned by billionaire Mukesh Ambani. According to the agreement, Zee will own 47% of the combined company, with Sony holding 53%. Shares of Zee will be delisted from the stock exchanges, and subsequently, the shares of the merged entity (the name of the combined unit hasn’t been disclosed yet) will be listed on the bourses. Through the merger, Sony will get listed in India without an IPO.