- Wednesday, February 26, 2025
By: Shubham Ghosh
SONY’S India unit on Wednesday (22) finalised merger plans with local broadcaster Zee Entertainment in a pact that might face a challenge from a dissatisfied investor from the US.
According to analysts, the arrangement could witness the setting up of India’s second-biggest entertainment network, rivalling market leaders Disney, AFP reported.
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The proposal gives Zee’s founding family four per cent of the new entity but gives them complete control in management with the chief executive officer and managing director, Punit Goenka, to continue in the leadership role, the report added.
“The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms,” he said in a statement.
Goenka’s tenure, however, has been opposed by Invesco – Zee’s biggest shareholder. In September, the American firm sought his ouster for “repeated governance failures and underperformance”.
Zee and Invesco have faced off in court ever since over the latter’s pursuit of a board overhaul.
Sony’s pact would also allow the family of Goenka to raise its stake in the combined entity to 20 per cent in the future, a clause shareholders led by the US firm are likely to disagree over.
However, analysts have felt more excited over the merger. A successful merger would be a “win-win proposition” that would expand the reach of both companies in India, Karan Taurani, a media analyst at the UK-based Elara Capital said.
“Sony has a strong sports offering and an urban entertainment offering, which Zee does not have, and Zee is very strong in the regional and rural segments,” he said.
India, home to 1.3 billion people, has an entertainment market worth $24 billion, according to accounting giant Ernst & Young.
The deal is likely to be completed by the end of March next year and the new company will be publicly listed in India, given approval from regulators and shareholders.
Sony Pictures Networks India will hold a majority 50.86 per cent stake under the proposed merger, the AFP report added.
