Tv network

Sony and Zee Lock India Merger to Create Mega TV Network

BENGALURU, Dec 22 (Reuters) – Sony’s Indian unit has finalized a deal with local rival Zee Entertainment to merge its television channels, film assets and streaming platforms, joining forces to take on the likes of Netflix and Disney in India.

India, still very hungry for direct-to-home TV entertainment, has seen increased competition from streaming platforms in recent years, including Netflix Inc (NFLX.O), Amazon.com Inc’s Prime Video and Walt Disney Co’s (DIS .N ) Hot star.

The Sony-Zee alliance, with around 75 news, entertainment, sports and movie channels, is now expected to overtake Disney’s Star India as the country’s biggest player. Read more

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The combined entity, which will be owned nearly 51% by Sony Pictures Networks India (SPNI) and 3.99% by the founders of Zee, will offer popular channels such as Sony MAX and Zee TV, and streaming platforms like ZEE5 and SonyLIV.

SPNI will have a cash balance of $1.5 billion at the close of the deal, including an injection from its own shareholders and Zee promoters, the companies said.

Zee boss Punit Goenka will be appointed CEO and managing director of the merged entity, which will be listed on the Indian stock exchange.

The move is expected to ease shareholder pressure for a management reshuffle at Zee, including the removal of CEO Goenka from the board due to corporate governance issues. Read more

Most of the board members of the combined company will be appointed by the Sony Group and will include SPNI’s current CEO, NP Singh, as Chairman of Sony Pictures India, a division of SPNI’s parent company, Sony Pictures Entertainment (SPE).

Singh said he would oversee SPE’s investments in India and identify opportunities to expand Sony’s presence in the country, according to an internal memo seen by Reuters.

Wednesday’s announcement follows a 90-day due diligence period that ended Dec. 21, and while the parties have signed definitive agreements, closing of the deal is subject to certain regulatory approvals.

Shares of Zee, which soared 35% to a market capitalization of nearly $4.5 billion when the deal was announced in September, tumbled in volatile trading early Wednesday.

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Reporting by Chandini Monnappa in Bangalore; Editing by Devika Syamnath

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