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Khushboo Dange
Zee-Sony Merger
Summary Content
The Zee- Sony Merger has culminated in to making
them as the second largest entertainment network
in India. Sony Pictures Networks India is a
subsidiary of Sony Corporation’s Sony Pictures
Entertainment. The merger had been announced on
22nd
September and had been finally closed on 21st
December.
Purpose of Merger
Sony Pictures Network has been looking for a
collaboration with an Indian Partner to shape its
business since it had been facing tough
competition from Disney-Star collaboration. It had
been previously in discussion with Reliance owned
Viacom which did not brought any outcome and
was called off. One of the reasons for executing the
merger is that Zee had a larger network viewership
than Sony. It derives most of it from regional
entertainment channels and movies in majorly
spoken languages being Hindi, Marathi, Tamil,
Telugu as well as Punjabi.
Details of merger
The merger entitles SPE to hold 50.86% holding in
the merged entity, Zeel to hold 3.99% holding in the
merged entity and balance 45.15% holding by
existing shareholders of SPN in the merged entity.
In short Sony Group continues to hold 96.01% stake
in the combined entity. The merger undertaken is a
revenue synergy with access to 75 TV channels,
two video streaming services (Zee5 and Sony Liv),
two film studios (Zee studios and Sony picture films
India), a digital context studio (Studio NXT) and
programming libraries.
The Zeel Group had been previously holding 2%
stake in the merged entity however sum paid
towards non-compete fees by SPE to existing
promoters of Zeel was utilized for acquiring an
additional stake of 1.99% in the merged entity
Mr.Punit Goenka will be the MD and director of the
merged entity however the right to appoint majority
of the directors on the board of the merged entity
remains with SPE.
The estimated valuation of Zeel- Sony’s TV
Business is at Rs.81400 crores + Rs.9100 crores for
consolidated digital business
Existing shareholders of Zeel will be getting shares
of merged entity at Rs.300 per share
Purchase consideration of the deal has been
Rs.113billions of which a capital infusion of Rs.11
billions was towards non- competing fees paid to
Zeel’s promoters.
Benefits of merger
The merger will entitle benefits in the form of
sharper content creation across platforms,
strengthen its footprint in the rapidly evolving
digital ecosystem, bid for media rights in the fastest
growing sports landscape and pursue growth
opportunities.
Vast Global Reach of Zeel will benefit the merger
since it has more than 40-50 million subscribers
and around 300 million monthly views
ZEEL’s strong expertise in content creation and its
deep consumer connect established over the last 3
decades, coupled with SPNI’s success across
entertainment genres (including gaming and
sports) will add immense value to the merged entity
and its management team, thereby
increasing shareholder value multifold.
Apart from these the merger will be getting access
over more than 4800 Hindi movie titles across
various languages , 260000 hours of Television
content, 24% market share of entertainment
industry as well as access to its varied business
segments being broadcasting,movies,music,digital
content as well as live entertainment and theatre
business both within and outside India
Merger Implications
 Post announcement of merger i.e after 22nd
Sept the share price of Zeel has shown a
healthy upward consolidation.
 The share has been bullish indicating to be
overbought. The target call price set by
Edelweiss being Rs.450 per share.
 The merger has gained confidence amongst
shareholders of Zeel

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Zee sony merger

  • 2. Summary Content The Zee- Sony Merger has culminated in to making them as the second largest entertainment network in India. Sony Pictures Networks India is a subsidiary of Sony Corporation’s Sony Pictures Entertainment. The merger had been announced on 22nd September and had been finally closed on 21st December.
  • 3. Purpose of Merger Sony Pictures Network has been looking for a collaboration with an Indian Partner to shape its business since it had been facing tough competition from Disney-Star collaboration. It had been previously in discussion with Reliance owned Viacom which did not brought any outcome and was called off. One of the reasons for executing the merger is that Zee had a larger network viewership than Sony. It derives most of it from regional entertainment channels and movies in majorly spoken languages being Hindi, Marathi, Tamil, Telugu as well as Punjabi.
  • 4. Details of merger The merger entitles SPE to hold 50.86% holding in the merged entity, Zeel to hold 3.99% holding in the merged entity and balance 45.15% holding by existing shareholders of SPN in the merged entity. In short Sony Group continues to hold 96.01% stake in the combined entity. The merger undertaken is a revenue synergy with access to 75 TV channels, two video streaming services (Zee5 and Sony Liv), two film studios (Zee studios and Sony picture films India), a digital context studio (Studio NXT) and programming libraries. The Zeel Group had been previously holding 2% stake in the merged entity however sum paid towards non-compete fees by SPE to existing promoters of Zeel was utilized for acquiring an additional stake of 1.99% in the merged entity
  • 5. Mr.Punit Goenka will be the MD and director of the merged entity however the right to appoint majority of the directors on the board of the merged entity remains with SPE. The estimated valuation of Zeel- Sony’s TV Business is at Rs.81400 crores + Rs.9100 crores for consolidated digital business Existing shareholders of Zeel will be getting shares of merged entity at Rs.300 per share Purchase consideration of the deal has been Rs.113billions of which a capital infusion of Rs.11 billions was towards non- competing fees paid to Zeel’s promoters.
  • 6. Benefits of merger The merger will entitle benefits in the form of sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fastest growing sports landscape and pursue growth opportunities. Vast Global Reach of Zeel will benefit the merger since it has more than 40-50 million subscribers and around 300 million monthly views ZEEL’s strong expertise in content creation and its deep consumer connect established over the last 3 decades, coupled with SPNI’s success across entertainment genres (including gaming and sports) will add immense value to the merged entity and its management team, thereby increasing shareholder value multifold. Apart from these the merger will be getting access over more than 4800 Hindi movie titles across various languages , 260000 hours of Television content, 24% market share of entertainment industry as well as access to its varied business segments being broadcasting,movies,music,digital content as well as live entertainment and theatre business both within and outside India
  • 7. Merger Implications  Post announcement of merger i.e after 22nd Sept the share price of Zeel has shown a healthy upward consolidation.  The share has been bullish indicating to be overbought. The target call price set by Edelweiss being Rs.450 per share.  The merger has gained confidence amongst shareholders of Zeel