The proposed merger between Zee Entertainment En terrorises (Zee) and Culver Max Entertainment (earlier Sony Pictures Networks India) has received approvals from the Bombay Stock Exchange and the National Stock Exchange.
Zee in a statement said that approvals marked a “firm and positive step” in the overall merger process and permitted the company to proceed with the further steps. The two companies had filed an application in the Competition Commission of India for its permission. It will now file for approvals from the National Company Law Tribunal (NCLT) and other regulatory approvals.
Zee and SPN had on December 22, 2021 signed a definitive agreement to merge the two companies. According to the said agreement, Zee will merge with Sony. After closing, the merged company will be publicly listed in India. Under the terms of the merger agreement, SPN will have a clash balance of $1.5 billion at closing, including through an infusion by the current shareholders of SPN and the promoters of Zee.
As part of the non-compete agreement, Sony Pictures Entertainment will pay Rs. 1,101.31 crore to Zee’s founder-promoters as a non-compete fee. This will be used by the Zee promoters to infuse primary equity capital into SPN, entitling them to acquire an additional 2.11% shares of the merged company.
Post-merger, Sony Pictures Entertainment will hold 50.86% percent stake in the merged entity, promoters of ZEEL will hold 3.99%, and the other ZEEL shareholders will hold a 45.15% stake in the combined company.